How about Never? Does Never Sound Good?

The workplace isn’t going back to the way it was before COVID-19, and neither are office space values.

That’s according to a forecast by Oxford Economics, which found capital values for offices will grow at an anemic pace through 2030. Persistent remote work trends coupled with an impending recession will suppress values, keeping them 17% lower than 2021 levels. 

“The shift to working from home following the Covid lockdowns has had a clear impact on real estate,” Abby Rosenbaum, an associate director at Oxford Economics, wrote in a commentary. “It’s the office sector in particular that has borne the brunt of the WFH impact.”

Oxford’s research highlights the existential crisis that has swept up many companies in the aftermath of the pandemic. If many workers can do their jobs just as well from home as in an office, what’s the point of an office? And what’s to be done with all those empty cubicles?

The exact number of people working from home varies depending on how it’s measured. Oxford cites data from the National Bureau of Economic Research, that shows 30% of all full-time days are worked from home.

Weekly Data from Kastle Systems, based on keycard swipes in actual offices, indicates about half of the workers that were punching in before the pandemic are coming into the office now. Austin has the highest percentage of workers back in the office, at more than 60%, according to Kastle, while San Jose’s office occupancy is running at about 36%.

Either way, the long-term effects on office values could be dire. Last November, researchers at New York University and Columbia forecast an “office real estate apocalypse” and a 39% drop in the value of office space.

Such destruction of value—some $413 billion by the researchers’ estimate—would hurt not only the owners of those properties, but the cities that rely on the taxes they generate, and the banks that financed office projects, potentially destabilizing the entire financial system.