McKinsey’s new research suggests that remote work will continue, with office attendance still 30% lower than pre-pandemic levels and attendance varying by age, income and seniority.
When the COVID-19 pandemic began in 2020, daily life changed for billions of people in countless ways. The most important, from the perspective of real estate in superstar cities, was a sudden and massive shift to remote work, a change that was enabled by widespread adoption of videoconferencing and file-sharing technology. In the blink of an eye, millions of employees were working not at their offices downtown but from their bedrooms and couches.
That shift affected their behavior in three main ways. First, of course, it changed where they worked. Second, it changed where they lived; untethered from their daily commutes, many of them moved away from urban cores. Third, it changed where they shopped, as online shopping and stores near home became more attractive than urban establishments. Those three behavioral changes, in turn, affected the three classes of real estate—office, residential, and retail—that we discuss in the next chapter.
The three changes were not all permanent, but they have left cities permanently altered. In this chapter, we examine them in detail. Our research suggests that remote work will continue, that accelerated urban out-migration is slowing but not reversing, and that shopping in cities will remain weaker than it used to be.