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State of the Industry: How RTO Mandates Are (Not) Impacting Commercial Office Space

RTO mandate meaning: This return-to-office policy requires employees to physically report to work, either full-time or with a hybrid remote-work-on-site schedule.  

RTO mandates. These post-pandemic policies that require workers to get back to the office don’t seem to be working, and that’s affecting CRE office asset class. FastCompany (1) reported in December that while employers haven’t budged on their intentions to issue RTO mandates, they have changed what RTO means. In 2022 and 2023, 90% of surveyed companies said they’ll issue RTO mandates; however, in 2023, only 19% said RTO equates to five days a week.

How has that affected CRE and office space?

Available office space in the U.S. hit record highs in Q1 of 2024, Bisnow reports (2), dashing hopes that return-to-office (RTO) mandates might right-set the market. 

Why? It’s complicated — many companies haven’t enforced RTO mandates for fear of driving good employees away, and they’ve realized the benefits of remote work staffs. Not only does the talent pool exponentially improve with a distributed workforce, but companies can significantly reduce overhead costs by reducing square footage. Companies are realizing that they can get by with a lot less space, taking advantage of flexible workspaces and collaboration spaces.

That’s great news for companies — reduced overhead, bigger talent pools — but not so great for commercial property owners, investors and managers.

According to a McKinsey study of 24 “superstar cities,” (3)  the Covid-19 pandemic caused the percentage of vacant office space to increase in every city from 2019 to 2022. Many employers downsized their office spaces to reduce costs as employees worked remotely or in hybrid setups. The report noted that as of 2023, nearly half of all tenants had not yet made a lease renewal decision, and economic uncertainty could further drive downsizing. 

Total office vacancies in the U.S. (4)

  • 2000: 9.2%

  • 2005: 12.2%

  • 2010: 15.4%

  • 2015: 13.8%

  • 2020: 15.5%

  • 2021: 16.8%

  • 2022: 17.9%

  • 2023: 19.2%

  • 2024: 21%

In this post, we’ve gathered data from multiple sources to illustrate how much the office space industry has changed in 20 years. With this market information and Biscred’s database of over 265,000 CRE and CRE-adjacent companies, service providers and vendors can better understand one another’s needs. 

Remote Work: Workers’ Points of View

Prior to the pandemic, an estimated 5.7% of workers worked primarily from home (5). By 2021, that tripled to 17.9%, but by fall of 2023, the number of full-time remote workers settled around 12% (6).

Remote (including full-time remote and hybrid) workers by year, according to data collected by B2B Reviews:

  • 2003 to 2019: Less than 10% of the U.S. workforce

  • 2020: Between 45% and 50%

  • 2021: 33.6%

  • 2022: 30.3%

  • 2023: 28.5%

B2B Reviews gathered data from various studies to help answer the question, “Do workers want to come back to the office?” and "What do employees returning to the office want/need?"

  • 65% of surveyed workers want to be full-time remote, while 32% said they prefer a hybrid schedule. 

  • 72% of surveyed respondents in another study said they prefer a hybrid model, while 13% say they want to work full-time from home. 

  • 46% of surveyed workers say they feel more productive when working from home.

  • 67% of hybrid workers say they feel more productive on work-from-home days.

  • 54% of respondents to an Upwork survey said not having to commute has been a better-than-expected WFH bonus (7).

  • 63% of respondents in a FlexJobs poll said they’d be willing to take a pay cut in favor of remote-work opportunities (8).

Remote Work: Employers’ Points of View

Employers, for the most part, want workers back in the workplace. Even though remote work is getting easier to accommodate, thanks to technology, and it lowers overhead costs, companies are still struggling. Why do employers want employees back in the office? Here’s what various surveys tell us: 

  • 64% agree that to achieve their business goals, they need workers on-site (9).

  • 42% require workers to be on-site 4 or 5 days a week. 

  • 75% of Fortune 100 companies now offer hybrid work schedules.

  • 80% of businesses that occupy office spaces have and will continue to have hybrid work policies (10).

  • 65% of companies that occupy office spaces have some form of RTO mandate, and 30% say they leave it up to employees.  

There is a common sentiment throughout the content that we reviewed: Hybrid work policies have changed the way organizations use office space. Not only are they requiring less square footage, but they’re also leveraging collaboration spaces more.  

While the sources do not provide details on lease provisions or negotiations, they consistently highlight the reduced demand for office space, increased vacancies, and hesitation from tenants and landlords due to the uncertainty caused by the pandemic's impact on work patterns and the adoption of remote and hybrid work models.

Return to Office Strategies

What are companies doing to get their workers to come back to work? Commercial property owners and property managers are investing in capital improvements to help companies mandating return to office, which could be good news for suppliers and contractors in several areas. Here are a few examples of how office building improvements: 

Innovative office building amenities

Getting creative to offer perks and amenities might entice workers to want to return to the office for at least part of the week. Some amenities that companies are offering include state-of-the-art fitness centers, resort-like common areas and outdoor spaces, and onsite childcare and partnerships with daycare centers.

In an extreme example of office space innovation, (11) the Maven Hotel in Denver offers shared amenities with a connected office building, which includes a bar and restaurant, beautiful lobbies, and fitness facilities.

Advanced technology and connectivity

Office properties are upgrading Wi-Fi and technology infrastructure, emphasizing the highest levels of security — all of which goes without saying. If you’re in an area that offers fiber optic internet, leverage that in your advertising to prospective tenants. Offer the most reliable internet infrastructure along with utility backups during power outages.

The Flatiron City (12) building at 84 Peachtree Street NW in Atlanta is an example of an office building that’s been updated to include 2 GB fiber optic internet, plus 24/7 key-card access for tenants, as well as flexible space.

Improved indoor air quality and sustainability

Post-COVID pandemic, many CRE properties have been implementing air quality improvements. Interestingly, though, some properties have also been adapting their sustainability efforts to include EV charging stations, bike storage and shower facilities for commuters. 

An example of an office building with improved air quality is IKEA’s North American headquarters, which features an atrium filled with biophilic elements, including a 46-foot living moss wall (13). 

Flexible workspaces

Flexibility is a buzzword in RTO mandates, referring to both flexible work arrangements (hybrid schedules that blend remote and in-office work) and to the physical spaces. Flexible workspaces are much more than coworking spaces. They include office properties that offer flexible leases, ability to grow as teams expand, in-office flex space that can be used as meeting spaces, quiet spaces, collaboration spaces and more. 

ROOM, a New York-based company, innovated portable office pods and phone booths that can be set up, moved and disassembled easily. They can be used for sound-proof webinars, sales calls and quiet time (14).     

Biscred & RTO 

The Biscred database includes contact information for more than 89,000 companies and 454,000 people who work in commercial real estate in the office asset experience (because we are continuously updating our database, the numbers of companies and people will change). The built-in filters allow you to narrow your searches based on location, company size, seniority level, and more.   

To get started, filter by Company Industry (try starting with “Operator,” which will include property managers) and by setting company asset experience to Office.  

You’ll see something like this, which shows 6,743 companies and 86,002 people. 

Contact us today for a hands-one demonstration of how Biscred can connect you with property managers, property owners, builders and developers who work in the office building industry. 


Photo 13654524 | 06photo |

(2) Bisnow, U.S. Office Market Outlook Gloomy As Availability Hits New High, 2024-04-14, accessed 2024-05-13

(3) McKinsey Global Institute, Empty Spaces and Hybrid Places: Chapter 2: The impact on real estate, 2023-07-13, accessed 2024-05-10

(4)  IBIS World, Office Rental Vacancy, 2024-02-27, accessed 2024-05-10

(6)  B2B Reviews, How Many People Work Remotely? 2024-03-06, accessed 2024-05-10

(7)  Upwork, Upwork Study Finds 22% of American Workforce Will Be Remote by 2025, 2020-12-15, accessed 2024-05-10 

(10) CBRE, Evolving Workforces: The Math Behind the Hybrid Workplace, 2024-01-11, accessed 2024-05-10

(11)  Colorado Real Estate Journal, The rise of dual uses: Hotel complements office, 2017-09-29, accessed 2024-05-13

(12) LoopNet, Flatiron City | 84 Peachtree St NW, accessed 2024-05-13

(13) Natura, 9 inspiring examples of biophilic design, 2023-04-06, accessed 2024-05-14

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