RTO After Labor Day: The Great Return or The New Reality?

Hybrid work is the new normal in 2022 and, according to recent polls, a consensus of the estimated 70M US workers who have proven they can work remotely during the pandemic believe it should be a permanent workforce strategy moving forward.

But not all of the bosses appear to have gotten the memo: Goldman Sachs sent a notice to all of its employees last Tuesday instructing them to return to the office five days a week.

Goldman’s internal memo, obtained by the NY Post, said the company will no longer require employees to be vaccinated against COVID or to be tested for it.

“There is significantly less risk of severe illness,” Goldman’s memo said, as reported by the Post. “In line with [the CDC’s] updated protocols, if you have not been coming in to the office, please speak with your manager to ensure that you understand and adhere to your division’s current return to office expectations.”

Asked to comment on the NY Post report, a Goldman Sachs spokesperson told the newspaper: “We continue to make steady progress bringing our people together in the office, which is core to Goldman Sachs apprenticeship culture and client-centric business.”

Last year, Goldman CEO David Solomon vowed that remote work would not become a new normal for the Wall Street investment bank, calling it “an aberration that we are going to correct as quickly as possible” at an international financial forum.

Based on NYC’s vaccine mandate, which still is in effect, workers at Goldman’s HQ at 200 West Street have to be vaccinated to enter the building unless they receive an exemption from the city.

Goldman may hope its stance will induce other companies to follow suit, but CRE experts appear to be accepting the reality that hybrid work is here to stay—and the days of 100% office occupancy are over.

In a CNBC interview last Monday, Silverstein Properties CEO Marty Burger projected that office occupancy levels will improve between now and the end of the year. In NYC, where Silverstein is one of the largest office landlords, the occupancy level is 35.3%, based on Kastle’s latest weekly survey.

“I think after Labor Day, you’re going to see an increase in people coming back to the office, and I think by the end of the year, you’ll have some new normalcy in what happens in the office market,” Burger told CNBC.

Asked to define “new normalcy,” Burger conceded that the persistence of hybrid work will preclude a restoration of full office occupancy.

“I think Tuesday through Thursday, you’re going to see maybe 70-80 percent office occupancy,” Burger said in the CNBC interview.

“It’s interesting, because if you ask someone if they want to work remotely, they’ll say yes. If you ask them if they want to give up their office space, they’ll say no,” he added.

Kastle Systems’ weekly back-to-work barometer, a 10-city average of office occupancy rates based on a survey of entry-card swipes, has been hovering around 43% since the middle of March.