The Future Of Commercial Office Space – What Does It Look Like?

At Laverty Chacón , we’re always thinking about the future of commercial office space. And the COVID-19 pandemic has gotten a lot of people thinking about the future of office real estate, particularly since more people than ever are working from home. Some professionals think that offices will become less important in the post-pandemic world, while others are convinced that office space will be more essential than ever after things return to normal.

Who’s right? There’s no way to tell. But let’s look at these two potential scenarios now and discuss how each one may affect the future of commercial office real estate.

Scenario 1 – Office Real Estate Becomes Less Important Due To Remote Work

This is certainly a likely scenario, and it’s happening right now! The ongoing COVID-19 pandemic has forced lots of white-collar workers to work remotely or from home instead of going into their offices, and the office real estate market has suffered accordingly. One study has predicted that the value of office spaces will decrease by more than 20% before recovering in 2022-2023.

This is almost entirely due to these offices closing down or offering limited capacity during COVID-19. Remote work has been quite successful for most companies, with a survey by PriceWaterhouseCoopers indicating that 83% of employers have said the shift was “successful for their company.”

Workers are also more enthusiastic about the shift to remote work than managers. This may be due to lots of factors – no commute, less micromanagement and close supervision, and more flexibility to accomplish work tasks, among others. The future of commercial office space is rapidly changing for employees and managers alike, and this is reflected in the numbers, too.

According to the same PWC report mentioned above, 75% of executives expect at least 50% of their employees to be back in the office by July 2021 – and only 61% of employees expect that to happen.

Over half of employees (55%) would prefer to spend at least 3 days working from home after COVID, while 68% of executives say that employees should spend at least 3 days a week
working in the office.

Scenario 2 – Office Real Estate Becomes More Important Than Ever

While remote work does seem like it’s the future, the pendulum could easily swing the other way. There’s lots of evidence that employees and executives are dissatisfied with remote work and its effects on their corporate culture and employee morale.

For example, only 3% of business leaders believe that 75% or more of their workforce will be working remotely full-time – with 49% believing that 25-75% of their workers will work remotely full-time.

This same study revealed that 100% of respondents believe that offices are important for allowing employees to “innovate,” “reflect on the company brand and culture,” and “experience community and social interaction.

These last points are important. Commercial office real estate is more than just a workplace – it’s a place for teams to come together. There is definitely evidence that remote work, while effective, is leading to employee morale issues. Due to continued lockdowns, social isolation is affecting the mental health of many people – particularly remote workers who are no longer able to connect with colleagues at the office.

When COVID-19 is eliminated, it’s entirely possible that commercial office space will be more in-demand than ever – with lower rents allowing companies to expand and move into new spaces.

Laverty Chacón Is Prepared For The Future Of Commercial Office Space

We don’t have a crystal ball and we can’t predict the future. But by understanding what could happen to office real estate in the future, we can prepare to respond accordingly – and ensure our clients get the property management and brokerage services they need for the best possible outcome.

If you need help navigating “The New Normal” of COVID-19 when it comes to commercial real estate, contact Laverty Chacón today. Our team is always standing by to help.

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