How Will the Pandemic Affect Office Space Use in the Future?
It is obvious that the pandemic is changing work conditions radically and permanently, but what does it mean for real estate? On the one hand, less office space will be needed as some companies switch to remote workers, and others close their business down. On the other hand, social distancing demands will create needs for even bigger office spaces.
Over the last twenty years, we have seen the average space per employee shrink with smaller offices, flexible workspaces, open-concept cubicles, and work-from-home options. More recently, however, the shift towards employee productivity and wellness has moved away from smaller, crowded workspaces.
Before the pandemic, many companies were already using technology, such as video conferencing platforms, leaving physical workplaces for more collaborative purposes. With the arrival of coronavirus, most businesses have had to adapt to changes in the workplace quickly. Social distancing measures, the shift to virtual meetings, and new conditions like the “six-foot-office” have dramatically changed what we consider normal.
The impacts of coronavirus will likely have lasting effects on the way we work and where we work. There will definitely be a shift, and it will likely be one in which employee safety, health, and comfort take priority. Other changes may be a permanent shift away from the office to remote work, or a massive reduction in the time spent in the office. Many companies will not be renting offices or expanding because of the crisis and remain in the space they have.
In some cases, coronavirus will push organizations in the opposite direction – they now need more space per employee. Companies have been squeezing more and more employees into offices for a long time, with, some being as low as just 100 sq. ft. per employee. For offices to reopen safely and maintain social distancing, ratios will have to increase again.
We will also probably see a preference for more private offices in the future. The trend has been toward open spaces over the last decade, with collaborative workspaces and shared conference rooms. However, most employees recognize some of the challenges of working in open workspaces.
Although collaboration may be easier, there are also many distractions. There is little sense of privacy. Also, clients have been asking for more private offices in the last couple of years. Now, there will probably be even greater demand for private spaces, even if it's for no reason other than minimizing social contact.
As a result of Covid-19 and the subsequent safety measures, office leasing has already slowed, and vacancy rates are starting to rise. But the current effect on office space should not be as profound as it was after the big 2007-2008 financial crisis.
Experts say that existing trends will certainly continue in office real estate, including a move away from the usual 10-year leases for shorter periods and flexible coworking space. Although those who signed 10-year leases are still obligated to meet the terms of those leases, this could affect their plans for expansion.
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