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In this issue

Results: Will the US office vacancy rate rise in Q3 to a new record level (16.5% or higher)?

Average reader forecast: 57%

Your forecast: [091023 GOES HERE]%

The end of the "good enough" office

The offices will likely stay empty: Most of you expect the US office vacancy rate to rise in Q3.

Before getting into the rationales for why the vacancy rate might rise or fall, I want to highlight two thought-provoking reader comments on the future of the office:

"The long-term trend is that the best employees will prefer either remote opportunities or world-class in-office opportunities at outlier companies. Run-of-the-mill companies that demand lots of in-office time will not get the best employees, so rational companies will realize this and offer reasonable flexibility."

In other words, gone are the days of the boring, old "good-enough" office. The only companies that will be able to make mandatory in-office work will be the outliers that can offer unique, campus-like experiences.

But what about those run-of-the-mill companies? The comment above suggests they won't have the ability to compel workers back to the office. How will they do with work from home? Here's another comment from a different reader:

Unless you're in a company full of exceptionally skilled and synergistic colleagues it's necessary to get the employees in a visible spot to ensure they are effective.

What if both these comments are right? If so, run-of-the-mill companies are facing a sort of remote-work trap. They don't have the glamorous office space to draw workers back, and they don't have the alignment and managerial acumen to manage remote work well, either. In this telling, the end of the office becomes yet another force pushing the economy toward winner-takes-all.

Readers' reasoning

Here's the overall distribution of readers' forecasts:

Most forecasters said the US vacancy rate would likely rise

And here are some of the rationales, with the forecast in bold:

30%: Cities are applying a lot of pressure to prevent this. I expect them to succeed unless enough of those businesses go under fast enough to empty yet more offices.

50%: More people will return to the office but remote working is also here to stay. In the end remote working saves corporate $$ in expensive real estate, so overall there will be less office space needed, but I'm not sure it it will rise to a new record high. I think it might flatten.

70%: While employers are flexing to gain some power back from employees, I think employees will dig in on working remote.

70%: The most in-demand occupations also continue to push toward remote options. I know of a talented dev who was considering applying to work at Meta, but Meta's antiquated remote work policy ranks them lower against other contenders because it would force the dev to move.

90%: As long as some leaders allow very flexible work, all leaders are subject to talent having that option. Management could turn this tide by making offices more appealing places to be. Dedicating most space to individual productivity work (i.e. cubicles) is galactically stupid. Make work a collaborative, problem solving space and more people will come back.

Trivia: Which US city had the highest office vacancy rate in Q2? 83% of you correctly guessed that it was San Francisco.

See you on Sunday, with an update on Bud Light.

Nonrival

Results: The "good enough" office is over

In this issue

Results: Will the US office vacancy rate rise in Q3 to a new record level (16.5% or higher)?

The end of the "good enough" office

Readers' reasoning

Nonrival

Scores: 📉 Consumer sentiment went down

Recap: Vibes will keep improving

Are the bad economic vibes over?