New York Leads Office Foot Traffic Recovery Among Gateway Cities

New York City’s office foot traffic was stronger in September than in any other large US gateway city, according to an analysis by Placer.ai.

Foot traffic to NYC offices has outpaced the national average and that of other major cities in both the year-over-three-years and year-over-year monthly office foot traffic metrics. In September, Manhattan offices saw a visit gap of 37.1% compared to 2019, and a 31.1% year-over-year-increase. Nationally, foot traffic is down 41.2% year-over-three-years and up 11.4% year over year.

“Notably, New York City is beating the curve despite being consistently ranked as having one of the highest commute times in the nation – but the city also has a larger than usual share of workers commuting to work via transit (as opposed to driving to work),” writes Placer.ai’s Shira Petrack. “This may indicate that the fear of sitting in traffic or spending too long behind the wheel area is keeping some workers in other major cities from emulating New York’s return to office rates.”

Among other large gateway metros, Chicago and Houston are still lagging behind the national average and are down 48.8% and 46.6% Yo3Y, respectively. And LA foot traffic has yet to pass the 50% mark, with office visits 56.1% lower in September than they were the same time three years ago.

Denver leads the workplace recovery among the other large cities Placer.ai analyzed, with a 37.3% Yo3Y visit gap in September 2022. In addition, “Dallas (-43.4% Yo3Y) is seeing a significantly smaller office visit gap than San Francisco (-62.8% Yo3Y) – even though San Francisco is showing impressive YoY increases, which may indicate that the city’s office recovery is still in full swing,” Petrack says. “Still, the discrepancy in office recoveries between cities in Texas and California may have to do with the inbound migration to the Lone Star State from the Golden State over the past couple of years.”

According to Kastle Systems key swipe data from August, US office occupancy is somewhere between 43% to 44% and is below 40% in San Francisco and San Jose.  And experts at Colliers have speculated that the widespread adoption of hybrid work is expected to cause a 15% drop in office space demand nationally.

Petrack says that in most cities, “it appears that the office recovery has essentially plateaued, with many employers settling on some form of hybrid work.”

“Most cities are hovering at around a 40% visit gap, which is most companies adopting a three-day in-office schedule. But with inflation and a changing labor market beginning to impact the power dynamics between employees and their bosses, the office recovery story may still have many key chapters ahead,” she says.