WHAT IS THE FUTURE OF OFFICE BUILDINGS?
So many articles coming out stating that companies are now realizing how much more efficient you can be with employees and executives discovering and being forced to use new technologies such as zoom and google meets etc.
If companies are letting employees WFH indefinitely, such as twitter, and we see this trend continue, what is the future of office space demand? Assume many employees are able to WFH and do an effective job.
For example, many of the software and tech companies that took space in a Manhattan office building. A majority of these companies that don’t technically require people to be in a physical office and are now experiencing this due to the pandemic, will people get used to working from home. What about other fields such as law group firms. Wouldn’t they require less space now that most documents are uploaded on the cloud and therefore require less space.
To recap: one takeaway from this pandemic is that there will definitely be less demand for office space. I can’t see how there will be more now that companies are easing up to it. What’s the future for this asset class and all the shops that own this sector of real estate? Bear in mind, we are at record unemployment.
Thoughts? Hope everyone can chime in.
I live in NYC, I am now doing a week in the office and a week WFH on rotation. The office is full of hand sanitizer, extra masks, gloves, bleach pray. When I leave my personal office to grab something from the printer or walk around I have put on my mask.
Even with all that it was really nice to go back into the office and have mask to mask conversations.
Real estate is a social, relationship based business there's always going to be a push for as much in person interaction possible. Yes a lot accountants, AP, AR people can work from home but can you really say you can learn to be a good acquisition or asset management person while not being in the office? This goes for any industry, without in person tutelage its impossible to really understand your company. Companies know this.
On the other end companies are going to need to dedensify, a BB bank has already leased additional space from us with the understanding that pretty much their entire build out they've done over the last couple years is now obsolete ("open office" concept with hoteling and large cafeteria/food services.
Do I know how we get people back into towers in NYC, taking elevators up and down, to and from there on public transit? Not in the slightest. Will I accept a position in the future with a company that doesnt have a full time spot for me in the office? Never.
Yes this will accelerate WFH by years, however COVID's lasting impact on office space will be depend on how long we are in this "new normal"