Ken Ashley’s a Cushman & Wakefield tenant rep practicing globally for over 25 years. He lives in ATL and thinks about real estate. A lot.
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I work as an office tenant representative broker. Yes, I make my living when people lease office space. Lately, people have had sympathy in their voices as they delicately ask, “How is your business?” The next question is usually, “What do you think the future of the office will be?”
The answer to the first question is that business is way down as we make our way through the fourth quarter of 2020. Executives have a fear of (long-term) commitments. I’m witnessing companies signing short-term renewals when they can and dumping space via sublease or lease buyouts at a frantic pace. Executives are wisely making the smallest decision possible with all the uncertainty afoot. I don’t blame them a bit – they need to be wise stewards of corporate resources. My job is a little lonely just now.
But what about the second question, regarding the future of the office?
One way to look at a problem is to look at the opposite reality and conceptualize the issue from a reverse approach. In this case, this means looking at the opposing reality of everyone in the world will work from home forever.
Imagine you were the workplace deletion czar in North America and had to figure a way to never allow people back in an office. You wouldn’t be allowed to let productivity suffer. Innovation would still need to occur. Companies would also need to recruit people to join their remote, merry bands and somehow differentiate from all the other companies with video meetings. And sales teams would need to sell more and more stuff from their living rooms with dogs barking and babies crying.
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Here’s a bonus: Now that you no longer have any rent, utilities or furniture cost, you can have the work-from-home employees soak up all those costs and improve margins of corporations even more.
Now, we need to tear down every office building in America and redevelop the real estate to some other need. What shall we build?
Of course, that analysis is ridiculous. So are some of the headlines saying that we will need almost no office space in the future. The truth is no one knows how this movie will end.
However, remember March of this year was an evacuation, and just because people are figuring out remote work doesn’t mean it is really working for everyone all the time. How many lawn crews, hungry kids and inappropriately dressed partners have you experienced in your hundreds of video meetings? Thank you, 2020.
I do know this: We have not changed as a species since March 2020. For thousands of years, we’ve been together and created remarkable achievements that have changed history and made our future very bright. Space travel, modern medicine, technological marvels of all kinds and anything innovators create are a few examples of the fruit from in-person meetings.
What We Do Know
After 25 years and multiple downturns under my belt, here are two things I know to be true about office space after Covid-19.
The Office As A Workplace
First, the office as a workplace will still be important when the virus is over. There are a number of indicators showing that people want to return to the office.
From conversations with the chief economist and head of global research at my company, a number of factors fuel the desire to work in an office at least part of the time. These factors include community, productivity, company culture and even mental health.
A colleague who works on the economics side of the company has shared that it’s clear the economy’s transformation into one focused on knowledge and oriented toward professional services will require office space. My company’s recent Workplace Ecosystems Of The Future report forecasts the U.S. will create 5.1 million in-office jobs this decade (2020-2030), up from 4.5 million last decade.
Second, we will now use office space in interesting and new ways. Many knowledge workers who have worked remotely will have the flexibility to work from anywhere. They will likely have access to dynamic workplaces from their homes, coffee shops or that second home in Boise. Just make sure to keep your Zoom shirt nearby.
Hub-and-spoke configurations are also up for discussion. Perhaps your headquarters is in Manhattan, but you have spoke locations in Northern New Jersey and Connecticut.
It’s likely the idea of highly dense workplaces is over and you will get a lot more elbow room. Large and many meeting rooms are also likely to be de rigueur.
Hello, Office. Are You There?
Is the office really dead? No way. What will certainly happen is companies and their real estate leaders will be charged with thinking beyond the sticks and bricks to empower their employees with communication and technology – no matter where the employees are located.
As for me, I will be just fine. Our phone has actually been ringing a ton with executives anxious to plan after Covid-19. Heads-up leaders increasingly realize the value of meeting in a physical space, and they are scrambling to make those spaces ready for life after this virus is gone. So, turn in your workplace deletion czar cleats, and let’s get back to work. I’ll meet you on the 31st floor.
Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?