Hybrid work and its effect on Office Space – McKinsey Global:
At a glance
- Hybrid work is here to stay. As a result, office attendance has stabilized at 30 percent below prepandemic norms.
- The ripple effects of hybrid work are substantial. Untethered from their offices, residents have left urban cores and shifted their shopping elsewhere. For example, New York City’s urban core lost 5 percent of its population from mid-2020 to mid-2022, and San Francisco’s lost 7 percent. Urban vacancy rates have shot up. Foot traffic near stores in metropolitan areas remains 10 to 20 percent below prepandemic levels.
- Demand for office and retail space in superstar cities will remain below prepandemic levels. I
- Real estate is local, and demand will vary substantially by neighborhood and city.
- Cities and buildings can adapt and thrive by taking hybrid approaches themselves. Priorities might include developing mixed-use neighborhoods, constructing more adaptable buildings, and designing multiuse office and retail space.