Not so fast.
Nearly two-thirds of U.S. workers toiling remotely during the pandemic would like to keep doing so, according to a Gallup poll. And for those who do return to the office, even if infrequently in months to come, the notion of “return” needs to be rethought.
There’s no going back to what was. The last nine months have forced a drastic reset of work, home and all points in between. The upheaval in commercial real estate allows companies to be pickier about their needs, from open windows to lower employee-to-bathroom ratios. An uncertain pandemic economy means expansion for some sectors and downsizing for others. And studies show that more than one-fifth of adults moved due to COVID or know someone who did; how this affects their desire or ability to commute remains another unknown.
And yet the office is not entirely going away. In fact, it might be more needed than ever as companies pivot to new realities and forge bonds among a workforce that, in very few cases, looks identical to the so-called before times.
“The future of the office market is productivity. The location of the office space may not change much,” said Carmen Perkins, executive vice president of Civitas Commercial Real Estate Services LLC, based in Washington, D.C. “It’s the utilization of that space that changes.”
Creating a work culture
Post-pandemic offices will focus more singularly on creating and representing the culture of a company. That mission will drive physical spaces with more breakout rooms and gathering spots. It will dictate who comes to the office and why. Reasons to convene: onboarding, training, meetings, team-building and collaboration.
“We are the quintessential tech company. We have the most flexible work schedule, ambitious paternity and maternity programs, unlimited vacation,” rattled off Nick Romito, the founder and CEO of VTS, a commercial real-estate technology platform. “Even as liberal as we are to give people their flexibility, it’s still really hard. You invest all this time in building a really good team, those teams want to be together. Pushing ideas out of each other is really hard to do when you’re staring at a screen all day.”
Still, despite concerns over Zoom fatigue, the democratized nature of gathering virtually is something managers want to preserve.
“Larger companies that are more geographically dispersed have gotten really thoughtful around engineering Zoom conversations. CEOs have been able to interface with cross-functional teams in more productive and democratic ways,” said Perkins. “Space becomes about maintaining and building culture. Continuing the cross contamination of ideas is very important. They want to preserve that.”
WFH is here to stay
Pre-pandemic, commutes were growing longer; the average American commute hit a record-high 27 minutes one way in 2018, according to the U.S. Census.
Families have made major life decisions in this pandemic to better balance home and work—moving closer to family, buying second homes on lakefronts or in the woods, renovating or creating offices in the guest bedroom or basement. Areas once considered remote or exurban are more affordable, offer more space and perks such as hiking trails and shorter lines at Costco.
Based on data in the third quarter of 2020, while rents in the country’s top downtown office markets have softened, companies are renewing leases at a higher rate than in 2019, said Dennis Perkins, founder and president of Civitas and Carmen’s husband. That “tells us that during a downturn, companies have opted to stay put and maintain a consistent urban presence.” However, while businesses are staying downtown, he says their workers are moving toward the suburbs.
“You are seeing the growth across the region,” said Dennis Perkins. “You see interest in cities like Baltimore where you can still work in D.C. but have a less expensive lifestyle, especially if technology and changing office uses enable you to commute less often”
The office of the future is a much more flexible place
Even before COVID, companies were loath to sign long-term leases in order to maintain flexibility in hiring and firing. This will continue or increase.
Civitas, a commercial real estate brokerage and advisory firm, has a client that asked its architect to develop transitional spaces and install modular movable walls.
VTS, the real-estate platform, has hired 75 people since the beginning of the pandemic, and will return to the office a much different company now (staff of 325) versus then (staff of 250).
“That’s a lot of people you’ve never met in person,” Romito said. “When you invest in culture and people, you can’t overnight take all that and translate that to a remote environment.”
Design and ventilation really matter
Even after vaccines, real-estate experts predict a transition to close quarters after months, even years, of social distancing. This has kept the desire for office space—13,000 square feet being the average size sought, according to VTS—about the same; fewer people will be coming into the office or stagger schedules but they want to maintain safe distances apart.
“People need to feel healthy and safe, that the environment is clean, and that these are environmentally healthy and not just energy efficient green buildings,” said Dennis Perkins. That includes, he says, cleaning protocols, upgraded air filters and filtration systems, occupancy maximums on elevators and directional signage within common areas and office spaces.
Homes must better evolve to support work—and women
Remember how office parks turned into mini-cities with game rooms, bowling alleys, daycare centers, dry cleaners and post offices? Now picture all those services closer to home, maybe even within your apartment complex. Carmen Perkins cites the pandemic’s disproportionate burden on women and the need for housing to better support families.
“Women have shouldered much more of the homeschooling and schedule management, not to mention being short-order cooks,” she said, laughing. “We have seen new multifamily developments respond to work-life balance. The interesting, attractive buildings going up in DC have coworking spaces built into them and flexible family-friendly amenities like playrooms. It’s not the workspace picking up the slack there.”
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