More and more Americans are returning to offices as the pandemic-fueled work-from-home trend continues to cool – but employees in a handful of cities are lagging behind.
The Placer.ai Office Index measures the amount of foot traffic in and out of 1,000 office buildings across America, providing a strong indication of which cities have bounced back.
It found that workers in two West Coast cities – San Francisco and Los Angeles – have been much slower to return to offices compared to East Coast cities like Miami and New York.
More than 60 percent of companies have already made their employees resume in-person work, according to an August ResumeBuilder study.
The study, which surveyed 764 companies, expects 87 percent of businesses to have required in-office days by next year.
Some economists and research organizations have extolled the benefits of hybrid or fully remote work. Here’s where Americans are embracing that practice the most.
San Francisco
In July 2024, office buildings in San Francisco had 52.7 percent of the visits they had July 2019, according to Placer.ai.
Office attendance nationwide has recovered to a little over 72 percent over the same time period.
San Francisco offices have been the emptiest of all the major cities since July 2022, when Placer.ai first began measuring foot traffic data from buildings throughout the country.
Part of this can be attributed to the city being one of the world’s largest hubs for tech, an industry that has the most remote work available.
The rise in vacant, or mostly vacant office buildings has coincided with a similar hollowing out of the city’s downtown corridor.
Research from consulting firm McKinsey suggests US counties with lower office attendance correlates to a lower number of retail workers – and therefore a smaller retail presence.
This has become a rampant problem in San Francisco.
Lloyd Chapman, of the American Small Business League, visited the city’s once-thriving Union Square area at the heart of its retail district in June.
The block that was once home to Uniqlo, H&M, Rasputin Records and Lush had empty, graffiti covered storefronts.
The retail flight has been staggering in the years since the pandemic, with Old Navy, Nordstrom, Whole Foods, Anthropologie and Office Depot announcing their closings in 2023.
Macy’s is expected to close its flagship store next year, which could leave a third of Union Square empty.
San Francisco’s offices got even emptier in August, ticking down to nearly half capacity when compared with the average foot traffic five years ago.
Houston
In July, Houston recorded the second worst office return rate of the cities analyzed by Placer.ai, showing 57 percent when compared to pre-pandemic numbers.
The city, home to NASA’s Johnson Space Center, had been solidly in the middle of the pack when it came to office recovery in the years since the pandemic, according to Placer.ai data.
But precipitous drops came right after southeast Texas was hit in July by Hurricane Beryl, which left 2.7 million customers around Houston without power in the immediate aftermath.
Houston had higher office attendance levels than coastal cities like Boston and Los Angeles as recently as February 2024.
Los Angeles
Los Angeles had the third worst return rate of the cities analyzed by Placer.ai, which found the city’s offices had a 62 percent return rate in July 2024 when compared with July 2019.
Los Angeles and San Francisco had somewhat similar office vacancy rates in the first quarter of 2024, at 27 percent and 32 percent, respectively.
The issue in the two cities become clearer when compared to New York City, where 17 percent of office space is going unused.
Los Angeles has faced some of the same problems as San Francisco when it comes to retail shops closing, albeit on a smaller scale.
Offices in Los Angeles were even less frequented in August, with attendance rates dropping to 60 percent capacity.
Denver
Denver had a slightly better return rate than Los Angeles, Placer.ai reported, with its office attendance bouncing back to almost 64 percent of what it was five years ago.
The city nestled in the Rocky Mountains is the capital of Colorado, a state that has the highest share of remote workers at 21.2 percent, according to Census data.
Denver has been having its own office space crisis, the Denver Post reported, with 33.8 percent of offices being completely vacant in the second quarter of this year, the highest rate ever recorded.
The report notes that class A office buildings – higher quality spaces with amenities like coffee shops and gyms – have much more activity than the average piece of city real estate.
Class A office space in Cherry Creek, an affluent neighborhood, has a vacancy rate of just 5 percent.
Chicago
Chicago boasted a notable jump in activity, with return rates at 69.2 percent compared to five years earlier, according to Placer.ai.
Foot traffic to major places of business in the Windy City did decline by roughly a single percentage point from July to June.
Chicago is comparable to Boston, but both cities’ return rates lag well behind Washington D.C., Dallas and Atlanta.
The midwestern city also hasn’t seen a retail doom exodus like in San Francisco.
Chicago has strong demand in dining, discount retail, fitness and education, according to a report by commercial real estate firm Lee & Associates.
The rebound began in the first quarter of this year, when there was a ‘significant rise in retail sales coming out of the pandemic and a reduction in store closures.’
New York and Miami
These East Coast cities take the cake when it comes to the prevalence of office culture. And it isn’t particularly close.
Miami offices saw a 90.6 percent return rate in July 2024, Placer.ai found, while New York came in just behind at 89.6 percent.
For both cities, along with most of the rest on the list, July was the busiest in-office month since 2020.
Miami and New York have been neck and neck in the office recovery race since June 2022.
Ironically, many people flocked to Miami and southern Florida in general during the pandemic so they could work remotely in nice weather.
‘Because there was the remote work option available to so many, Florida and mainly South Florida became the ultimate escape,’ real estate agent and investor Ron Myers told Realtor.com.
He continued: ‘The sunny weather, no state income tax, and a lifestyle upgrade in many cases coupled with remote work flexibility were major draws.’
The return-to-office mandates have had effects on the real estate markets of the two cities.
Miami’s housing demand is going through a bit of a slump at the moment, thanks to a variety of factors. Realtor.com senior economic research analyst Hannah Jones said return-to-office mandates could be a factor.
‘In-office requirements may have pulled some buyers back to their original location,’ she said.
Meanwhile, the New York metro area has seen its real estate market slowly heat back up since record low demand in July 2021.
‘With more folks heading back to the office, the New York City market has seen steady growth,’ Manhattan broker Sean Adu-Gyamfi told Realtor.com. ‘However, many prospective buyers are still having trouble deciding how close or far away they want to be to their workplace.’