When Will We Return To The Office?
As all of my office building clients know, 2020 was a tough year on office vacancies. The traditional office has been replaced for the most part by Zoom meetings in workout clothes. Industrial and Flex type units are almost impossible to find, yet there are loads of office buildings looking for buyers and renters. So what will 2021 bring to the owners of standard office buildings? Will office buildings begin a transition into unique building-use transformations? We will see. Below is a great article about where we think things will be headed as we enter 2021.
The COVID-19 pandemic has meant office builders were quieter this year as workers were forced to stay at home, but vaccines now being made available, landlords are hoping for a turnaround in 2021.
Any return to the office won’t happen just yet though. It’s said that vaccines won’t be made widely available until late spring or early summer next year, and until that happens it’s unlikely people will be allowed to move around without any restrictions.
“Hundreds of billions of dollars of office building value and mortgages depends on the timing and scale of the return and how that affects office leasing and rents,” The Wall Street Journal reported this week. CBRE Group Inc. estimates office rents could still drop by up to 8% next year as the nation remains in a remote workforce or some form of it.
Public health experts say that around 65% of people in the U.S. must be immunized for its COVID-19 infection rate to drop below 10 new cases per 100,000 per day. If that happens, it’ll be one of the milestones to look for in order to get workers back to the office in significant numbers. Health officials say they’re optimistic that they can have around 45% of the U.S. population vaccinated by late spring.
Even so, any return to the office will be gradual, and employees will probably still be required to wear masks and social distance themselves from other workers when they do get back to the office. Experts say working from home is likely to remain common, with many employers going for a hybrid model even when the pandemic is under control.
“Businesses that are highly competitive for top talent will likely begin opening small satellite offices in metropolitan areas and offering employees the option of working there, at home, or in centralized headquarters—or a combination of the three,” The Wall Street Journal said.
In any case some companies are beginning to make return-to-office plans. The Journal reported that some office building owners have seen an uptick in tenants that are planning deals in numerous buildings rather than just one for the return of their offices. Some are also in discussions with co-working firms like WeWork and Industrious to help spread out the return of their employees over multiple locations.