Texas' downtown office occupancy is well below pre-pandemic levels
Why it matters: If this keeps up, it's a game-changing shift for the economics of Austin and cities nationwide.
- The COVID-provoked disruption could be comparable to the exodus of manufacturing from cities in the late 20th century, University of Toronto professor and noted city watcher Richard Florida told the Wall Street Journal.
Details: Occupancy rates are low even in parts of country like Texas that loosened pandemic restrictions in recent months: 52% in Austin, 48% in Houston and 47% in Dallas.
- Of note: Kastle measures occupancy by looking at foot traffic into offices, pulling data from security swipe cards and key fobs.
The backstory: For years leading up to the pandemic, Austin officials bet big on downtown, promoting business and condo growth north of Cesar Chavez as a way to build a resiliently vibrant central neighborhood.
- More than 20,000 downtown jobs were added in the greater Austin metro between 2010 and 2018 — not all that long before the pandemic struck.
Yes but: All those shiny condo buildings springing up mean Austin is at least a little insulated from the dive in office occupancy.
- And the return of lobbyists, lawmakers and their staffs when the legislature reconvenes next year will give downtown another boost.
The big picture: Loads of people who started working from home during the pandemic aren't going back. That means less demand for office space now and, conceivably, fewer office workers in the future.
The bottom line: An emptied-out downtown has a ripple effect on restaurants, music clubs, coffee shops and other lifeblood businesses.
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