Employers are increasingly implementing return-to-office mandates, despite the negative impact on employee retention, as indicated by a recent study conducted by Unispace. According to the study, 72% of global employers have enforced return-to-office mandates, potentially driven by the struggling commercial real estate industry.
Throughout the COVID-19 pandemic, office buildings remained unoccupied while a significant number of individuals enjoyed the convenience of remote work. This shift in work dynamics led to a decline in the demand for retail and office spaces. Despite the lack of utilization, companies reluctantly continued to bear the financial burden of maintaining unoccupied offices. The costs associated with unused office spaces likely posed a significant financial challenge during quarterly and annual budget evaluations.
As the economy entered an inflationary phase, interest rates increased, and lending standards for commercial real estate (CRE) loans became stricter. This created difficulties for numerous businesses. Some companies recognized the signs and transitioned their teams to hybrid or fully remote work schedules, while simultaneously divesting their commercial real estate assets in a more discreet manner. However, others were slower to adapt to the changing landscape.