Can the Office Market Survive the Great Resignation?
March 30, 2022 | Erik Sherman | GlobeSt.com
Office occupancy has continued to be a worry for investors, owners, operators, and even tenants who want workers back in the office. It has generally risen of late, with the first quarter showing higher rates and rents. But even then, there’s enough vacant office square footage that it could take nearly three years to absorb all of it, and that’s assuming widespread physical obsolescence doesn’t push people away and drive rents down to a point where many buildings may no longer be financially viable.
CBRE Research says that the so-called Great Resignation—an historically large voluntary departure of people from their jobs—is making employee acquisition and retention more difficult and, as a result, putting even more pressure on occupancy rates.
The numbers can be concerning, whether the “with 0.6 people available to fill each open job, as of December 2021” or “labor force participation at an all-time low and record numbers of Americans quitting despite rising wages.”
There’s also the basic question of interpreting what the numbers ultimately mean. Some people like Derek Thompson in The Atlantic argue that the “increase in quits is mostly about low-wage workers switching to better jobs in industries that are raising wages to grab new employees as fast as possible.” The end of extended pandemic unemployment support last year didn’t leave people with anywhere near enough to retire early.
