BACK TO THE OFFICE ?

The question is , how comfortable will firms be keeping some of those people home permanently versus the value of having them back in the office ?

The 2020 numbers are bleak . A recent report from Cushman & Wakefield Chief Economist Kevin Thorpe noted that the office sector experienced 104 million sf of negative absorption in 2020 — more severe than the impact of the recession of 2008 . In the wake of COVID-19 , 1.15 million office-using jobs were eliminated , with office vacancy rising from 12.9 percent to 15.5 percent by the end of 2020 .

“ Office leases are long term ,” says Dan Spiegel , vice president and managing director for Coldwell Banker Commercial . “ We ’ re in the discovery phase of what the future of office will be and what its impact on office property owners will be . In the short term , the pandemic has driven employees home . The question is , how comfortable will firms be keeping some of those people home permanently versus the value of having them back in the office ? Some firms are subleasing space because , in the near term , they ’ re not seeing the need for employees to come back to the office . Other firms are taking space because they ’ ve come up for renewal , and they have to make a decision . We ’ re still in the early stages of understanding what the longterm impact will be .”

More than anything , the watchword appears to be flexibility . The first key will be how companies decide to bring workforces back to the office . The Cushman & Wakefield report notes several big-picture factors that will affect this return , including the trajectory of the virus , the speed at which vaccines are rolled out , how soon schools reopen , and government

policies . But companies and employees will also have to examine the necessity of coming back to the office after a year of figuring out how to work remotely . Working at home , of course , is nothing new , but , Spiegel says , “ the pandemic has accelerated many trends in the workplace that were already underway .”

“ We ’ re entering a near-term era of workplace flexibility ,” he adds . “ Companies are not yet sure of what they ’ re losing by not having people in the office , so they don ’ t know if they want to give up the office all together . Some people are comfortable working from home ; others are challenged balancing family priorities and other things .”

“ There ’ s still a wide unknown out there ,” says Scott Homa , senior vice president and director of U . S . office research for JLL . “ Before the pandemic , 10 percent of who you ’ d typically think of as an office employee worked principally from home . We think that share is certainly going to increase , but it ’ s likely to increase more within a hybrid format ,” where employees may come into the office only a few days a week . The challenge in moving in that direction , though , he says , will be managing the capacity of the space and accommodating work schedules , safety protocols , and other factors .

Another factor , particularly in high-density urban areas , is the commute . Homa notes that it may be a while before people are comfortable getting on crowded trains or buses . Add to that the commuting time itself — a recent PwC / Urban Land Institute study calculated an average of 227 hours a year saved by not commuting . The savings , according to the study titled Emerging Trends in Real Estate , “ has been well received by many . That is certainly not surprising , since it is the equivalent of 28 days that could be dedicated to work or leisure .”

A large part of companies ’ reluctance to invest too deeply in a remote format is the nature of the office itself . “ The purpose of the office in many ways is not just providing an environment for people to do individual tasks , but more so around the collaboration and innovation that the physical space can be used to facilitate ,” says Homa . “ People want to be together to collaborate , problem-solve , and meet with clients .”

Offices provide other functions as well . “ In-person workplaces are critical for company culture , innovation , [ and ] onboarding for new employees ,” according to Emerging Trends in Real Estate . Younger or new employees may prefer the office environment , which could provide more opportunities for

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