The pandemic didn’t so much result in new migratory patterns as reinforce those that were already underway, Placer.ai reported earlier this year. However, the analytics firm says in a new follow-up study, “even small shifts can have a significant impact on regional economies.”
Nowhere was this impact more evident than in the office sector, where the persistence of hybrid work and work-from home continues to keep office occupancies far below pre-COVID levels. In turn, Placer.ai says, “business centers in major cities are seeing significantly less foot traffic now than they were pre-COVID, which is having a major impact on local dining and retail.”
Individual markets are seeing varying impacts from the below-average office occupancy. One factor that has a major impact on the local office recovery is the net population change of each city.
Denver and New York City, both of which have experienced population increases compared to 2019, are seeing office occupancy gaps smaller than the national average. Conversely, San Francisco continues to lag with occupancy down nearly two-thirds from pre-pandemic levels, and Chicago is within the occupancy gap range cited by Placer.ai.
Although markets with lagging office occupancy or population declines shouldn’t be written off, “the changes of the past two years do mean that retailers, restaurant operators and local government officials in these cities may now be serving a slightly different audience than in 2019,” says Placer.ai. “Understanding these demographic shifts can help stakeholders in these regions focus on the needs of their current populations.”