From Fortune:

US cities are still grappling with empty offices four years after Covid-19 lockdowns gripped the country. Office occupancy in 10 major metropolitan areas rose to 53% for the week ending Jan. 31, a new high, according to Kastle Systems.

Despite the havoc wrought on commercial real estate, mainstream cities aren’t unduly worried.

Worker reluctance to return to the office has sent ripples through the real estate sector, as evidenced by New York Community Bancorp being downgraded by Moody’s after announcing reduced payouts and building reserves to cover bad loans tied to office space.

A decrease in office occupancy affects city finances through the revenue collected from property taxes, but how cities are affected by these losses is a subject of much debate.

Apart from companies mandating office returns or threatening firings, employee office attendance has plateaued around 50% – dips occurred during summer holidays and holiday periods.

The impact of office vacancy rates on city taxes will vary by city, with cities with large central business districts expected to face the most impact, but most cities are expected to have “a stable credit picture”.



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