What Does the Future Hold for Commercial Office Space?

Future of Commercial Office Space

The world has been on standstill. Over one year ago, the COVID-19 pandemic sent nearly all employees from commercial office space to home offices. In mid-March of 2020, 67% of employers shifted their operations to allow their employees to work from home.

Employers, employees, property managers, and owners of commercial real estate viewed remote work as a temporary solution. Two weeks of working from home, we thought—and then it’d be back to normal. But this was far from the case.

As we’ve passed the year mark since the start of the global pandemic, many businesses and employees have found themselves accustomed to working from home—and even preferring it in many cases.

So, that brings us to our question: What does the future hold for commercial office space? What’s our take at Voit Real Estate Services? The office is not dead but is simply being reincarnated.

Here’s why.

Future of Commercial Office Space

Working From Home: The Good, the Bad, and the Ugly

Today, we watch small numbers of employees trickle back into the office, along with students and teachers back into school. Even with the upturn of the global pandemic on the horizon, however, many companies continue to embrace the idea of permanent remote work.

The pandemic has shown us that many jobs, which you believed could never have been done remotely, can be done from home. For many businesses, eliminating commercial office space is the answer to their financial prayers—it’s a quick answer to spending cuts that need to be made.

For some, remote work offers freedom and a more laidback schedule, time with their family members, and higher productivity. Plus, no one seems to be complaining about missing their commutes!

According to research from Stanford, 42% of Americans are working from home full-time. The awkwardness of Zoom calls has faded and many plan to continue working from home in the near future. Not only is it a financial save but working remotely for many is also viewed as a health save.

Humans have adapted incredibly during this unexpected challenge, but some are ready for things to go back to “normal”.  Research shows that although many Americans enjoy working from home and the flexibility it brings, they do not want to be fully remote in the future. 

Some are dying to get back into the office, it seems. Typically, those who work in highly collaborative work environments have suffered the most. Additionally, Generation Z, those just entering the workforce, have been hit hard with remote work. Working in person, even on a hybrid schedule, is extremely important especially for this generation.

There are employees who have worked with companies for over a year now, without ever meeting any of their team members in person. Working from home loses the face-to-face interaction and connectedness that you can expect from a traditional work environment. According to research, 55% of people say working remotely puts a strain on collaborative efforts, making it more challenging.

Company leadership recognizes the benefits of side-by-side collaboration, how it adds to their company culture and gives new employees a sense of belonging. So, what can we do?

The bottom line: People want to return to the office, but with the proper health and safety precautions in place.

Reimaging Office Space

Prior to COVID-19, according to the New York Times, office spaces were moving toward open-concept floor plans and co-working offices with high volumes of employees. 

Now, however, the design for office space has shifted yet again. Due to COVID-19, to optimize health and safety, distance and compartmentalization within the office will be prioritized. 

Property managers will have to adjust accordingly to maximize the protection of their tenants. This might look like frequent sanitation, enforced hygiene procedures, and air purification systems.

Before the pandemic, businesses championed their high-end office amenities: game and meeting rooms, access to luxury fitness centers, the list goes on. After over a year of living in a global pandemic due to COVID-19, however, the list of must-have office amenities has changed dramatically. 

The office is not dead, per se, the future of office space, however, is evolving to accommodate work post-COVID.

The focus, through the past year, has shifted more importantly to safety. People and businesses altogether care less about fancy amenities in commercial buildings and instead about minimized touch technology, indoor air quality and ventilation, and proper social distancing in the workplace. 

Tanya Wood, director of Soho Works, gave her opinion on what the office might look like in ten years. “By then we expect the workplace to have become even more comfortable,” says Wood. “A place where you choose to spend more time without the pressures and formality of the traditional office.”

Wood explains that for many, the office is more about a sense of belonging. “People love to belong and feel part of something,” Wood says.

Commercial Impact

Although the need for office space decreased in 2020, there are main aspects of commercial real estate that stayed relatively stable. According to an article by Forbes, this included: “warehouses for e-commerce, self-storage facilities, and certain retail spaces for grocery stores and pharmacies.”

The commercial real estate industry has, of course, stepped up to the plate of challenges brought by the global pandemic.

According to WSP, there will be an inevitable decline in the need for office space; however, this decrease will vary by industry. For example, worst-affected are commercial buildings for tourism and leisure, whereas we’ve seen that “technology and e-commerce are already more likely to embrace virtual working”.

It is interesting to note, however, that although less office space may be needed altogether, companies will need more space per employee, as to follow social distancing guidelines.

As for commercial developments that are yet to have been built, some might wonder if we even need the additional space. This all varies and depends on supply and demand in a specific market.

According to some experts, the economic impacts of the COVID-19 pandemic will last long into the future for commercial office space. Company leadership, especially in a pandemic, might be looking to make budget cuts, and eliminating office space might be the easiest way to do so.

Looking to The Future

With the decrease of COVID cases and the increase of vaccinations being distributed, the end of the pandemic seems more attainable than ever. Still, for many, remote work will continue to be the new normal.

At Voit, we understand it all. If offices are, in fact, not dead, people need to at least feel safe when returning to them. 

No matter what you’re looking for, we provide creative solutions that create value for our clients and their commercial real estate goals. Contact us today to find out what Voit can do for you!