Remote work is nothing new. Many employees had occasionally been telecommuting from home or clients’ offices long before the COVID-19 turned Zoom meetings and Slack messages into the norm rather than the exception. However, despite the vaccine rollout, employees are not rushing to get back into the office.
Remote work is here to stay
The majority of employees wish to keep working from home at least part-time in the future. They appreciate the lack of commute, flexibility, and better work-life balance that remote work provided in the past year. Work-from-home was a success for companies as well, with the productivity of their employees remaining stable or even increasing during the pandemic.
Major companies, such as Facebook or Amazon, are switching to a fully remote or hybrid model for the foreseeable future. According to an Upwork survey, as much as 22% of the American workforce could be fully remote by 2022 – not including employees following a hybrid model. Widespread high-speed internet and the explosion of digital tools, such as Trello or Zoom, make it easier than ever for teams to work seamlessly together no matter their location. In other words: work-from-home is here to stay.
It is distressing news for commercial real estate, particularly for large office buildings that are now sitting empty or underutilized as employees work from home multiple days a week. Once a sign of prestige, these properties now represent an unnecessary expense for companies.
Long term strategies for office spaces
Single-occupant buildings, where each employee had access to their assigned cubicle, may be on their way out. However, this shift in lifestyle also presents new opportunities for investors and companies.
Some property owners are considering converting their office buildings to mixed-use or residential use since many cities are experiencing a housing shortage. Besides, employees working from home part-time or full-time often appreciate having access to facilities such as co-working spaces close to their place of residence. However, reconversion comes with many issues, ranging from zoning to physical updates.
Companies are also calling for more flexibility. Employees still need an office where they can gather to work and exchange, even if it is not a daily occurrence. However, traditional yearly leases are too long of a commitment. Instead, firms prefer shorter terms (monthly, weekly, or even daily) to adapt to their workers’ needs. Property owners may also want to expand their leases to more than one tenant. Several companies, as well as freelancers and startups, could share the space to maximize occupancy.
Besides, telecommuting has changed the way employees work. Instead of assigned cubicles, they need gathering areas to meet with clients and work collaboratively, as well as private rooms where they can focus without interruptions.
What is next for commercial real estate?
Commercial real estate is facing dramatic changes in the wake of the COVID-19. Investors and property owners must adapt to offer solutions better fitting to the expectations of both companies and their employees to survive. By working with corporations and local authorities, they will be able to thrive in a post-pandemic world.