In Pandemic-Era First, Half of Chicago Workers Back in the Office

Ever so slowly, the chair at the office workstation is winning out over the couch at home.

Office staffs in Chicago and other major cities are returning to their physical job sites, even if the trend is so sporadic that it frustrates building managers and businesses eager for more downtown action.

One widely followed data source on post-pandemic office usage has crossed a threshold. Kastle, a provider of building security systems, said that in late January, office occupancy levels in Chicago exceeded 50% for the first time since the coronavirus shutdowns hit businesses in March 2020.

For the week of Feb. 1, Chicago office usage was exactly 50% after being slightly higher the prior two weeks, according to Kastle. In other words, the company is finding that in buildings using its systems, half of all employees here are swiping in.

Patrick Caruso, president and chief executive of building manager L.J. Sheridan & Co., said the numbers generally agree with what he’s seeing. “The occupancies have been in the 40-50% range the last few months,” he said, noting that the results depend on the day of the week.

“The smaller tenants have more people coming back than the larger tenants,” Caruso said.

Mondays and Fridays are regarded by everyone from C-suite leaders to Uber drivers as the slowest days. “I don’t believe people are coming to work on Fridays at all anymore,” said Robert Nevera, general manager of Petterino’s restaurant at 150 N. Dearborn St.

“We still have a bit of a Covid hangover,” he said, noting that his restaurant is hurt by fewer people visiting the Daley Center across the street, where much court-related business is still remote. “We used to have lawyers in here all the time. Not anymore,” he said.

On the plus side, he said Petterino’s has seen more patrons lately for the downtown theaters, especially the matinee performances. “I can only imagine that it will start to get better in the spring. People are feeling a little more free and safe,” he said.

The Building Owners and Managers Association of Chicago, the trade group for downtown property interests, said its mid-January survey of members found a 41% occupancy rate. Amy Masters, the association’s director of government and external affairs, said its monthly surveys have found occupancy rates to be mostly the same since last August.

In Kastle’s numbers, Chicago’s occupancy rates are higher than most of the nine other U.S. metro areas it studies, including New York and Los Angeles. Laggards in its rankings include Austin, Texas; San Jose, Calif.; and Philadelphia.

Pre-pandemic, occupancy percentages were more than 90 percent before dropping to rates in the teens in the first year of the pandemic, Kastle reported.

The comeback is “agonizingly slow,” said Michael Edwards, president and chief executive of the Chicago Loop Alliance, representing downtown businesses. “It seems to be the young professional that’s coming back the most. Maybe they are more concerned about career prospects and making a good impression.”

Edwards said he expected more workers to return as the weather improves in the spring.

A psychological boost could come in May, when federal and Illinois officials have said they plan to lift emergency orders involving COVID-19.

The pandemic’s scars on commerce linger, though. It forced many downtown retailers and restaurants to close, and some have been unable to reopen. Rising crime downtown may keep some people off the street and off public transit.

Along the once exclusive stretch of North Michigan Avenue, store vacancies are about 29% of available space, far higher than historical rates, said Gregory Kirsch, executive managing director of real estate firm Cushman & Wakefield. When the city asked developers last year for ideas to rejuvenate the La Salle Street corridor, it said retail vacancies there were 36%, highest of any submarket downtown.

“I see these darkened spaces everywhere,” Nevera said. “Because I’m in the business, I know that behind each shuttered door there are 30, 40 jobs that have vanished. It hurts to see that.”