More workers have returned to the office than at any point since the COVID-19 pandemic began, according to card swipe data from Kastle Systems, a provider of building security systems.
In the week ended April 6, Kastle’s 10-city occupancy average of 43.1% increased from 42.0% in the previous week. So more than two years after the pandemic hit the U.S., more than half the U.S.’s office space isn’t being used, according to the Kastle data.
As has been the pattern, the highest occupancy rates are in three metro areas in Texas — Austin (63.0%), Houston (55.5%) and Dallas (50.9%). The biggest increase occurred in the Chicago metro area, with its office occupancy rising to 37.8% from 34.5%, followed by the San Francisco region, which rose to 34.2% from 31.8%.
The occupancy rate only declined in two regions — Dallas, which fell to 50.9% from 51.4% and San Jose, which fell to 33.0%, the lowest occupancy rate of the 10 regions, from 33.5%.
Clearly, office REIT stocks have been depressed since the pandemic. The S&P Composite 1500 Office REITs index has declined 3.9% since March 1, 2020, while the S&P 500 has climbed 49%, as seen in this chart.
By name, Office Properties Income Trust (OPI) slumped 20% during that period, Paramount Group (NYSE:PGRE) stock declined 14%, Highwood Properties (HIW) dropped 7.8%, and SL Green (SLG), which is concentrated in the New York City market, fell 6.6%.
Also see (April 12): Spate of office lease expirations looms over landlords, banks
