How office vacancy rates have changed in the 10 most congested metros
Downtowns across America were hollowed out due to the COVID-19 pandemic's reduction of in-person work in 2020. Three years later, many offices remain empty or sparsely occupied as workers and employers opt for more flexible workweeks.
The shift to hybrid work schedules that has played out in the years since began with health concerns, but it continued thanks to a surge in new technology over the pandemic, making remote work easier. Rising costs for housing near jobs and gas to commute also made remote work more attractive.
Firmspace used CoStar and National Association of Realtors commercial real estate data as well as INRIX traffic data to illustrate the relationship between office vacancies and traffic as hybrid work has become more common in the U.S. All vacancy rates are as of the fourth quarter of their corresponding year; cities are ranked in reverse order based on those with the most hours lost to traffic.
Hybrid work schedules are feasible for most workers in the U.S.; have shown an ability to reduce turnover by more than 30%; and allow workers to reinvest the time otherwise spent commuting to raising families, recreation, or secondary jobs. The average worker who could perform their job remotely saved more than an hour a day, a National Bureau of Economic Research paper found.
Office vacancy rates rose about 3% nationwide on average from 2019 to 2022, according to commercial real estate data from CoStar and the NAR. Vacancies were lower in less populous suburbs through the end of 2022, while buildings in major metros tended to have more empty offices.
Traffic data suggests offices in cities with the most traffic have struggled to fill office towers. The average worker in one of the most congested cities, measured by INRIX, lost about 105 hours to traffic in 2022.
This year, even companies with growing revenues are deciding to shrink their physical footprints. Dallas–Fort Worth-based banking software provider Alkami is among the most recent to jettison its extra tower space. In some downtowns, vacancies have begotten more, with one San Francisco community leader describing empty buildings as having an effect "like a virus" that kills business opportunities for others.
