Post Labor Day Survey – Are Tenants Returning?
Recently, BOMA/GLA surveyed a select number of members asking whether tenants have returned and what their plans are. Many managers had expected tenants to return after Labor Day, so our results are a snapshot of what’s happening now around the region. While the results were somewhat diverse, there were definitely themes that emerged from manager responses.
The survey was short, asking only 3 questions:
- What was your tenant occupancy prior to Labor Day?
- Did it change after Labor Day?
- What is the target date for most tenants to return?
We also asked for comments to allow for more insight into tenants’ plans.
While our sample of managers was small, we received responses from around the County, including West LA, Downtown LA, Beverly Hills, Pasadena, Burbank, the Valley, Long Beach and the South Bay. Building sizes ranged from 200,000 to 800,000 sf.
Occupancy Prior to Labor Day
While the responses ranged from 3-100% occupancy, the mean occupancy prior to Labor Day was 27.8%.
Change in Occupancy After Labor Day
- 56% of respondents said there was no change.
- 31% experienced an increase of between 2 and 5%.
- 6% saw a decrease of 10%.
- 6% saw an increase of 20%.
Projected Target Date for Tenant Return
- 56% said most of their tenants are returning the first quarter of 2022.
- 19% said tenants are expecting their employees to return this year.
- 19% indicated tenants are still considering when to return, and have expressed no specific date.
- 6% are already fully occupied.
Comments regarding Tenant Return
There were definitely themes among the manager responses. Here are the highlights:
- Tenants are watching the spread of the Delta variant before requiring employees to return.
- Certain types of firms have returned sooner: engineering, financial services, advertising, computers, online sales.
- Some tenants will not be returning, while others will use a hybrid schedule.
- Some tenants currently have team meetings in the office, and will gradually add staff back over the fall.
- A number of tenants are weighing requiring proof of vaccination prior to employees returning.
- Tenants are starting to feel this will go on forever, so they need to start making plans to deal with the circumstances.
While these percentages may not reflect a given manager’s experience, it shows the indecision of tenant employers to bring employees back this fall while the spread of the Delta variant continues. They also show that occupancy has significantly increased from last summer when 2 to 5 percent was common.
Finally, the comments indicate most tenants intend to use their space in the coming months, but may allow employees to work differently than before the pandemic.
The current uncertainty around tenants reoccupying space is one of a number of issues managers will have to confront to truly facilitate recovery for the industry.
With these concerns in mind, BOMA/GLA will continue to advocate for policies that will support CRE professionals, while further developing resources and opportunities for our members.
To view up-to-date documents and other resources to help you and your buildings achieve success in this ever-changing climate, we encourage you to visit our Economic Recovery Resource Center.