U.S. Office Occupancy Reaches Highest Level Since Pandemic

After a downturn in December due to the COVID omicron surge, U.S. office occupancy levels have been steadily increasing and in March reached their highest point since the pandemic began in early 2020. As of March 30, building security provider Kastle Systems reports that its 10-city index of U.S. office occupancies reached 42% of its pre-pandemic level after falling to just under 18% in December.

Figure 1: National Office Occupancy During the Pandemic

Source: CDC, Kastle Systems, "Back to Work Barometer", March 2022.
Note: Occupancy data is indexed (February 2020 = 100). COVID Cases 7 Day Moving Average.

Although the index can be volatile from week to week, office occupancy levels are expected to gradually improve throughout 2022 based on preliminary findings from CBRE’s Spring 2022 U.S. Office Occupier Sentiment Survey. Of the 185 corporate real estate executives surveyed, 36% indicated that a return to the office was already underway. Another 26% said they planned to begin a return by the end of Q2 2022.

Figure 2: Return to Office Timeline
Question: When do you expect to encourage a more regular return to the office?

Source: CBRE U.S. Office Occupier Sentiment Survey, 2022.

It likely will take the rest of 2022 before companies can fully assess the effectiveness of their return-to-office strategies. About 38% of survey respondents are mandating specific timelines for a return, while 48% are leaving the decision up to their employees. Those leaving it up to employee discretion expect that a return will take place slowly throughout the year, while those mandating a return are largely already doing so. Regardless of the approach, companies are focused on creating a flexible office experience that is highly desired by employees.