The pandemic necessitated a shift from working in offices to working from home. The migration created veritable ghost towns in major cities, as American employees retreated to the safety of their homes. As a result, employees and companies emerged, who were more comfortable with a work-at-home model. In fact, some companies discovered that their employees were more productive at home. Without a doubt, these companies will stay the course post-pandemic. But which changes are coming to the commercial office space market post-pandemic? Let’s explore
A Shift Back to Commercial Offices
With this shift in the workforce, many argued that the commercial office space market was essentially “dead”. Conventional wisdom would dictate that with more people working at home, there would not be a need for office space. This could not be further from the truth. For instance, a recent Allen Matkins/UCLA Anderson Commercial Real Estate Survey said that the demand for commercial office space is set to increase in the next two years.
Creating a Collaborative Environment
The Allen Matkins/UCLA Anderson Commercial Real Estate Survey recognizes that many companies will need to bring employees back to the office. These companies understand the importance of having employees in the same space. Employee proximity helps generate environments that are better suited for collaboration, resulting in new ideas and innovations. Plus, they acknowledge the limitations of technology and accept that Zoom and other video conferencing methods cannot fully elicit what they need from their employees. Simply put, the remote approach is not a one-size-fits-all solution. However, bringing employees back to the office will not be the same as pre-pandemic.
An Office Space Revolution
The type of office space and demands made by companies will be quite different. Clearly, investors need to fashion new or redeveloped office space to meet tenant demands dictated partially by public health guidelines. Companies will demand health and wellness standards that have become much more significant during the pandemic. These companies will seek state-of-the-art HVAC systems, as well as better indoor air quality, including increased use of fresh air in the space. In addition, they will want touchless technology and adjustments to floor plans that maximize the distance between employees. Tenants will force a reinvention of the modern office space.
As we move past the pandemic, it is important for investors to realize the demands of the new commercial real estate market and adjust accordingly. Investors should consider the feasibility of adjusting current office spaces, as well as purchasing and redeveloping existing space. The time is ripe to make changes and prepare for the forecasted demand. After all, no one got ahead by being behind the curve.