You have probably heard the quote, “The reports of my death are greatly exaggerated”, attributed to Mark Twain. While the real quote was far longer and without the zing, the intention of the message gets across. There can be reports on one thing while the reality is often something else. This has been the case with the office sector in commercial real estate. When the pandemic hit in early 2020 everyone began working from home where they could ditch their business attire in favor of sweats and alternate the day between Zoom meetings, baking bread and binging “The Mandalorian” on Disney+.
Initial studies showed people could be more productive from home. Reports indicated that people were often logging on at all hours and businesses began to give up physical spaces in favor of allowing employees to work from home for the near future. People began to report on the death of the office. What would happen to the millions of square feet of office space that was going to sit unused now that everyone was going to work from home forever? Would we convert it to residential living space? Bulldoze and build parks? The truth is that now that we have had a year of working remotely companies are beginning to see the need to come back to an office due to an erosion in that productivity for some very simple reasons.
The first is that people are social animals by design. We need contact with other human beings and not just for the basic social needs. Working together builds relationships and fosters growth and ideas. No amount of Zoom, Slack or Teams can replace the experience of sitting down with a colleague and working through an issue together. Secondly, it is very difficult for a supervisor or manager to have a sense of the physical and mental wellbeing of their staff if they are not seeing them on a regular basis. How can you tell if an employee is suffering over a Zoom meeting? Conversely, how can an employee show their value and worth to an employer when it comes time for review and promotion. Given the option of working from home or working in a safe office environment, I believe the majority of people will choose the safe office environment.
I believe we are going to see a transformation in how office spaces are designed. I can also see a hybrid model continuing in some office environments, especially technology based companies. We still have a long way to go to reach “normal” but I believe it is time to welcome the office back to the land of the living.
Brian Johnson is the new president of the Santa Barbara Association of Realtors. He is a California licensed real estate agent and the managing director of Radius Commercial Real Estate. Brian handles all types of commercial real estate transactions, but has a special focus on multifamily investments. He can be reached at 805.879.9631 or firstname.lastname@example.org.
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