The post-COVID-19 corporate office
A 25-year veteran of the Denver Metro real estate market discusses his thoughts on returning to office life post-COVID-19
Our “new normal” and beyond
As we near just the two-month mark of the COVID-19 crisis, it feels like we have endured it much longer than that. With most of the American office workforce working from home, I find myself looking forward and not back any longer. No more talk about time management at home, how to maintain a professional image in sweatpants or how to run a Zoom meeting.
I find myself thinking about the lingering effects and the future impacts of this pandemic on the office environment and office workforce. The impacts will change the way millions of us work in offices around the country for both the short and long term. Here, I share my thoughts on:
- Immediate effects that have taken place in just six, short weeks
- Potential long-term threats
- Issues I don’t foresee having lasting impact
This crisis has probably been the hardest thing most of us have been through, unless you survived the Great Depression of the 1930s. I don't want to talk about the horrible health crisis we continue to endure or the, hopefully, once in a lifetime economic crisis we currently find ourselves in. Both are much more important in the grand scheme of things.
However, I want to recognize that most of us will go back to work in our offices, cubes, conference rooms and lunchrooms very soon. As we do this, many of the ways we work are going to change, some significantly. Corporate users need to evaluate their situations and prepare for impending changes. Think about how unlikely a training room filled with 60 people in 200 square feet feels right now? Or how about a 2,000-person conference in Las Vegas? Both feel like a lifetime ago.
Immediate effects on the future office environment
Unprecedented times bring uncertain answers. While I don’t know exactly how or when we will be invited back to our office spaces, I do know things will be different.
My findings are based on my own 25 years of experience in the corporate real estate industry, as well as numerous conversations I’ve recently had with companies of all sizes, landlords, developers and other real estate professionals.
Some of these observations and comments I’m relatively certain of, others are questions and discussions as to how corporate America reacts in the first few months after having a 100% remote work force for at least the last six weeks.
1. Health will be everyone’s biggest concern: How can we ensure the health and safety of every employee (and limited visitors) that come through our door? This will be the issue keeping most Human Resources managers up at night for many weeks to come. I know of a company that is contracting a third-party healthcare provider to take every employee’s temperature as they enter their facility. This might become the norm for the foreseeable future. I assume this may violate some privacy laws, but are we all expected to give up some rights and liberties to get the economy moving again? What happens to the employee who has a slight fever and an important meeting in 15 minutes? The frequency of cleaning offices and shared spaces will be a hot topic of conversation and highly scrutinized. How do high-rise buildings ensure that elevators are safe when occupied by multiple people? Will masks be the new “tech casual”? Will hand sanitizer be on every other table, desk and countertop? Probably.
2. We will go back to work in phases: I was on a call with a large company in Hong Kong today who is about 2-3 weeks ahead of our re-entry. They shared insights and learning of the process:
- They divided the employees into arbitrary teams, “A” and “B”
- Team A was able to come to the office on even dates of the month and Team B on the odd dates
- Employee workstations are at least 2 meters apart and conference rooms have a maximum number of occupants
- Large breakrooms will be entirely vacant except for quick eating of lunch or using a vending machine
- Zoom and WebEx meetings have continued to be the standard
3. Accommodating for distancing guidelines: Companies will have to be more concerned about employee spacing and being very cognizant of not forcing employees into an environment where they are working at 6-7 employees per 1,000 square feet. For context, many technology companies occupied at 8-9 employees per 1,000 square feet pre-COVID. In the immediate near-term, abiding by spacing guidelines is accomplished by the phasing approach. The big question – is this a sustainable long-term solution? For some, yes, it probably is, but others will eventually want the entire team back together which will lead to having to make more difficult decisions on occupancy and spacing.
4. Immediacy considerations: Are companies eager to get their teams back into the office and everybody in the same physical space as soon as possible? Creating a world class culture is challenging with a disparate workforce. Idea generation can be as spontaneous as an impromptu discussion in the hallway, right? Or is corporate America thinking that post-pandemic, our company has operated efficiently with all my employees working from home, so, maybe we can operate with a smaller group in the headquarters and keep some at home? This could save money on real estate costs, lower occupancy and some employees are happier, and likely more efficient, working from home. Challenging decisions.
These are all challenges that every company with office-based employees is going to have to deal with on some level over the next few months. I’ll leave it to history to tell us how the majority will handle these challenges in 12-18 months. Again, these are unprecedented times.
Potential long-term threats
The longer-term challenges and opportunities are always tougher to understand. Some of my noted “new-isms” in the corporate real estate world will linger post-re-occupancy while others will be phased out rather quickly. Some people are predicting this will be the beginning of the end of the high-rise office because of the high concentration/density of individuals in one space. Some think employers will decide to eliminate the central office altogether.
I don’t agree with either.
I do see more employees working from home on a permanent basis and see non-critical business travel and large conferences being curtailed or completely eliminated for a longer period of time. Las Vegas, Orlando (including Disney World) and other major cities and venues that rely heavily on corporate conferences to occupy hotels, convention centers and restaurants will be in for a tough few years ahead. I also wonder about the liability this will bring to companies that aren’t careful about cleanliness and ensuring infected employees aren’t at work or are isolated from others.
I can almost hear the legal argument now…“you put four employees into a small conference room, ABC Employer. One got the others sick; therefore, you are liable for…”. There are a lot of potential risks there. Liability concerns may be the most impactful issue facing corporate America going forward. Companies will have to be more mindful now more than ever about the potential risks of the wellbeing of their employees with even the slightest bit of a perceived or confirmed illness. How this gets enforced is a major challenge. It will absolutely take a lot of honest accountability from employees.
I have lived and worked through three other major recessions. The post-9/11 period may not have been considered a recession in most of the country, but it did affect the real estate market for a period of time. The tech collapse of the early 2000s and the financial meltdown of 2009-2010 were real recessions where people lost jobs, homes and money. Generations who lived through these times were rightfully terrified of the future. All of these downturns eventually ended, and the real estate market bounced back stronger than ever. When in the inferno, sometimes there doesn’t seem to be an end or solution in sight. However, I’ve learned that companies, people and economies are resilient, and this crisis will too come to an end. We will be stronger as a society because of it. If I was a betting man, I’d bet that within 12-18 months of us all getting back to our offices, cubes and break rooms, that this horrible crisis is a distant memory and we will have found our “new normal” is similar to the old normal and our optimism will be restored once again.
At least I can hope so…. plus, it makes the too many days in my very brown, home office feel shorter.