indicators of improving U.S. market conditions
Reduction and elimination of restrictions—especially for those who have been vaccinated—matched with warm weather and summer vacation will drive activity up and push more of the country “back to normal.”
As of mid-June the national Back-to-Normal Index was at
Nearly half of states (23) were above 95. Only 11 states and Washington, DC were below 90, the lowest at 81.
Back to Normal IndeX
Source: CNN Business/Moody’s Analytics, accessed July 9, 2021.
Back to Normal Index methodology
signs of return to normalcy
As office reopenings continue in earnest during Q3, companies will pilot different remote work policies, hybrid models and office layouts to find the right fit for their culture, business and people.
For more insight related to reopening offices, access Leading An Active Recovery.
Source: Cushman & Wakefield Research
Based upon public announcements from 120+ companies.
A fourth of companies have announced flexible schedules or indefinite access to remote work.
Companies Reopening Offices
of organizations that have made public announcements about their return-to-office plans have reopened offices at some capacity.
Employee occupancy rates remain low, but companies are setting firmer targets for employees to return on a more regular basis.
As of June 2021, a fourth of organizations announced plans to allow employees to choose remote indefinitely (11%) or have implemented flexible policies (16%). This is most common among technology companies (49%) and banking / finance institutions (33%).
Employee attendance is likely to plateau through the summer and then rise later in Q3 as kids go back to school and companies encourage a return to the office.
Weekly occupancy bottomed in February 2021 at
It doubled to
by the end of June.
Increase in office usage after initial plummet
Fall 2020 plateau
Holiday dip followed by volatility related to case increases and cold snaps
Steady improvement corresponding with vaccine rollout
Source: Kastle Access Control System Data
Weekly occupancy reaches new highs in June
UPTICK IN Office Occupancy
The week of June 14 marked the
when NYC traffic congestion was in line with
FIRST WEEK in 2021
the 2019 AVERAGE.
Other markets have similar patterns. In
San Francisco, for example, Muni ridership in June was 32% of the same month in 2019 while car traffic is considerably higher (77% of the 2019 level).
NYC Car Commutes Have Recovered, but Public Transit Has a Way to Go
Source: Metropolitan Transportation Authority
rise in NYC subway ridership
The growth in company searches is leading to increased leasing activity, which was up 15% QoQ in Q2 2021.
As of July 2021, the amount of office space being searched for by companies is up YoY in major markets, including:
VTS Office Demand Index (VODI):
Increase in Activity: Dec 2020 through May 2021
New York City
Source: VTS Office Demand Index (VODI), June 2021 Report
Interest in Office Space Rising
improving market fundamentals
According to the VTS Office Demand Index (VODI), office tour activity has more than doubled in the first half of the year. However, it will take time for that to lead to lease executions and then absorption. Leasing activity has started to recover; look to absorption to begin to improve in the second half of 2021.
Office-using Employment (Millions, SA)
Source: Moody’s Analytics, Cushman & Wakefield Research
Since the pandemic’s start, U.S. office net absorption has been negative, but office-using job growth is improving, adding 389,000 in 2021, and new leasing activity was up
YoY in Q2 2021.
U.S. retail and restaurant sales ended
Q1 2021 up
Employees returning to the office will increase foot traffic for retail and restaurants in business districts around the country.
Restaurant Performance Index (RPI)
Source: National Restaurant Association; U.S. Census Bureau; Moody's Analytics Forecasted