In this Chief Economist special edition, BGO’s Ryan Severino explores the evolving office market and its ties to broader labor and technological trends. Despite widespread skepticism about the sector’s future, BGO sees enduring strength in office demand, driven by structural labor shortages and long-term job growth. As Baby Boomers exit the workforce and replacement rates lag, labor scarcity will continue to support employment expansion—especially for college-educated workers. The college wage premium remains significant, ensuring sustained demand for skilled labor that relies on office environments, including healthcare and professional services.
BGO also addresses the misconception that AI will erase office-based employment. Instead, the firm notes that automation has historically displaced non-college jobs, while technology adoption tends to boost demand for high-skilled, educated labor. With AI amplifying productivity and the value of cognitive work, BGO projects steady office utilization over the medium term. Even if hybrid work persists, the firm underscores that commercial real estate (CRE) is a long-duration asset, and the office sector’s resilience should not be underestimated.
Read the full article here: Office Insights