The bustling traffic, the movement of people around the most contested corporate intersection in the largest Brazilian metropolis (we are talking about Faria Lima Avenue with JK Avenue in the city of São Paulo), and in other commercial areas in São Paulo, such as Vila Olímpia, Paulista, and others, are observations that can be seen with the naked eye and testify that residents of São Paulo are attending offices more days per week.

In the financial sector, the era of hybrid work seems to be behind us. Many companies have returned to a 100% in-person work model, even exchanging laptops for desktops. This decisive move, though debatable, reflects a strong belief among these companies that in-person work is set to make a robust comeback, as indicated by market data and statistics.

In contrast, New York City is grappling with the equivalent of 30 Empire State Building-sized vacant offices. This prolonged emptiness not only affects investors and property owners but also has a cascading impact on retail, services, and restaurants in the surrounding areas, all suffering from unprecedented vacancy rates.

The U.S. office vacancy rate reached 19.6% at the end of 2023, a significant concern for the world's largest market in this asset class. The decreasing office building values, down by nearly 40% since the pandemic, and the uncertainty surrounding the reduction of necessary office space by businesses add to the challenges.

Commercial contracts typically span 5 to 10 years, and decisions on space reduction remain pending for many companies. McKinsey's latest hybrid work report, evaluating major global cities, suggests a 30% decrease in office presence compared to pre-pandemic levels. In the U.S., a moderate scenario predicts a 13% decrease in demand by 2030, further pressuring rental prices.

In Latin American countries, particularly Brazil, Mexico, and Colombia, according to SiiLA market statistics, these countries paint a more positive picture. Market Analytics' 2023 year-end data forecasts a decline in vacancy rates for these countries. São Paulo, analyzing commercial buildings (A+, A, and B Classes) in the main corporate regions of the city, the end of 2023 recorded a net absorption (total leases minus returns) of 65.6 thousand square meters. This figure is close to the same indicator from 3Q19, still in the pre-pandemic phase, where 67.1 thousand square meters were accounted for. The vacancy rate was 20.5% in the last quarter of 2023, compared to 21.2% in 3Q23. Considering Top-Tier assets (A+ and A), the market forecast is even more positive, with an estimated decline in vacant areas over the next three years.

In Mexico City, the largest office market in Mexico, which concentrates more than 12.2 million square meters of assets, the vacancy rate against the total stock was 21.2%, compared to 22.2% in 3Q23. The net absorption for the last period of the year was 114 thousand square meters. In the Mexican capital, the vacancy rate is already the lowest since 3Q21.

Bogotá, the capital of Colombia, ended the year with a vacancy rate of 12.1% and net absorption of 16.9 thousand square meters. In 3Q23, the rate was 12.7%. Another highlight was the increase in the average asking price.

According to Giancarlo Nicastro, CEO of SiiLA, the cultural factor strongly favors the return to full-time in-person work. "Culturally, Latin populations value being together, face-to-face interactions. There's also the issue that during the pandemic, remote work was forced, and there wasn't time for employees to adapt their homes for remote work. It's natural that, gradually, people return to workplaces three to four days a week."

"Many feared the pandemic would end offices, but they are more alive than ever," adds the executive. To confirm the thesis, Nicastro mentions the recent transaction by Itaú Unibanco to acquire the Itaú BBA headquarters in the Top-Tier building Faria Lima 3500, for almost R$1.5 billion. This is the largest single-asset sale transaction in Brazil, according to the executive.