Recent research from the McKinsey Global Institute has modeled future demand for office, residential, and retail space in several scenarios. Findings based on these scenarios indicate that:
- Hybrid work is here to stay. As a result, office attendance has stabilized at 30 percent below prepandemic norms.
- Demand for office and retail space in superstar cities will remain below prepandemic levels. In a moderate scenario that McKinsey modeled, demand for office space is 13 percent lower in 2030 than it was in 2019 for the median city in the study.
- Real estate is local, and demand will vary substantially by neighborhood and city. Demand may be lower in neighborhoods and cities characterized by dense office space, expensive housing, and large employers in the knowledge economy.
- Cities and buildings can adapt and thrive by taking hybrid approaches themselves. Priorities might include developing mixed-use neighborhoods, constructing more adaptable buildings, and designing multiuse office and retail space.