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Back in Business in 2021: Repercussions of the pandemic on commercial office culture and space

Published On
Jun 15, 2021

In March 2020, life in the United States seemed to come to an abrupt halt. Efforts to slow the spread of COVID-19 forced many of us to turn spare closets and kitchen corners into home offices. Images of empty rush-hour freeways and emptier toilet paper shelves were all over the news. Downtown commercial business districts and suburban office parks became ghost towns as online collaboration services such as Zoom struggled to keep up with surging demand.

Fast forward to today, more than a year later, and we see a chance for life to return to normal. Schools went back to full-time, in-person classes in most states this spring. Many restaurants, hotels and airlines have returned to business as usual, with a possible need for face masks in some settings. Even retail malls have seen shoppers return to their bargain-hunting ways.

Commercial office space remains a question mark, however, with many employers not anticipating shifting from current work-from-home practices until at least the end of the summer. Even after COVID-19 transmission fears have faded, some believe we’re not likely to ever see a return to prepandemic office staffing levels. Workers have become used to having at least some at-home work time, and employers see advantages in offering this option as a benefit, especially as productivity levels remained strong throughout the last year. Commercial real estate companies are beginning to see a hybrid of at-home and in-office work schedules as a new normal, and they are planning for what that could mean for occupancy rates and the future of office design.

How bad was it?

The dramatic drop-off in commercial office occupancy can be seen in some simple statistics from commercial real estate leader Cushman & Wakefield, Chicago. In its “Global Office Impact Study and Recovery Timing Report,” released September 2020, the company documented a net absorption rate of -59.1 million square feet for 2020 in commercial office buildings. Furthermore, they anticipate a -61.8 million square feet net absorption rate for 2021.

It’s important to note that these figures only count properties that became physically vacant—in other words, the tenants broke or didn’t renew their leases and moved all their furniture and equipment out of the space. Not included in the report is space tenants are trying to offload to others through subleasing.

For example, in late October, real estate market research firm NFK Research identified 3.8 million square feet of available sublease space in Boston’s leading commercial business districts, which is about double the space that came available after 2008’s Great Recession. Similarly, Cushman & Wakefield’s Q4 2020 Vacant Sublease Space report identified 4.9 million square feet of available space in Chicago and 19.3 million square feet in Manhattan.

Of course, commercial real estate’s loss was a boon for collaboration software providers, with Zoom at the top of that list. According to company figures, the number of daily participants grew by 30 times in just four months, from 10 million in December 2019 to 300 million by the end of April 2020. This could have boosted the need for higher bandwidth and new electric connectivity in remote offices.

As the pandemic’s impact stretched from weeks to months to more than a year, many office workers actually got used to their stay-at-home routines, appreciating the nonexistent commutes and added time with family. This is why corporate tenants are beginning to rethink their space requirements as pandemic restrictions ease and employees can begin to return to their workplaces safely. Employers are hearing a desire from their workers to consider plans that allow them to still spend at least a couple days a week working from home.

This interest is highlighted in results from a global survey conducted by Chicago-based commercial real estate services company JLL (formerly known as Jones Lang LaSalle). Interviewing more than 2,000 workers, researchers found that 66% of respondents were receptive to a hybrid work approach involving a mix of office, home and, possibly, a third place (such as a coffee shop). Overall, JLL’s report concludes, remote work should double, going from an average of 1.2 days per week prepandemic, to 2.4 days per week in the future. Interest in this kind of flexibility is especially high for younger workers; JLL’s survey found those over 50 years old were more likely to prefer returning to fully in-office work once it’s safe to do so.

For the commercial real estate consulting firm CBRE, Dallas, a hybrid approach will become the new normal for many corporate employers, with the share of employees working exclusively from the office falling to 27.7% by 2030. This figure comes from CBRE’s July 2020 report, “Remote Working: The Potential Impact on Office Demand,” which sees post-pandemic work-from-home policies leading to a 15.2% drop in office demand in the near-term, versus prepandemic projections.

What will work look like?

So, what will workplaces look like, when today’s homebound employees venture back to the office? Opinions on this question have seesawed dramatically over the course of the past year. During the first few months of the pandemic, many forecast the end of the kind of open office plans that have come to be the norm for many employers, especially in the tech and financial services industries. No one would feel comfortable working jammed together at worktables with little personal space in the wake of a global pandemic, the thinking went.

Over time, though, companies realized that the value of a central office lies in encouraging the collaboration open offices foster, and thoughts of moving office workers back into individual cubicles began to decline. Instead, attention is turning toward increasing per-person square footage to enable greater physical distancing. This “de-densification” could help counter the effect of having more employees working from home, in terms of a company’s office size.

A global survey by Cushman & Wakefield and the corporate real estate association CoreNet Global, Atlanta, released earlier this year, indicates the continued popularity of open-plan office space, with 85% of respondents saying the phrase “mostly open seating” will either describe or somewhat describe their post-COVID offices. And a third or respondents noted that seating will be mostly unassigned—compared to 64% who said unassigned seating did not describe their offices before the pandemic.

Steelcase, Grand Rapids, Mich., an office systems furniture manufacturer, developed some work- and office-design strategies to consider once pandemic dangers have passed, including:

  • Expanding the ecosystem of places—including the office, home and possible satellite spaces—from which people can choose to work
  • Shifting office environments from fixed architecture and furniture placement to become more fluid and adaptable to future disruption. Empower employees to make these changes themselves, based on the type of work they’re doing and the level of privacy they need to do it.
  • Focusing on the “me within we” to allow more places for employees to focus, because not everyone can easily do heads-down work at home; with video conferencing likely to remain a common element in our daily work lives, workers also will need more spaces to take video calls without disrupting those around them.
  • Making every collaboration space high performing by incorporating such tools as digital whiteboards, easy power access and the ability to control the level of privacy; traditional conference rooms don’t always foster creative thinking and now present physical distancing challenges.
  • Merging the physical and the digital with larger-scale video collaboration devices along with touchless technologies for lighting, doors and other physical controls and sensors to help control occupancy levels and influence cleaning frequency

Change is the only certainty

While the initial impact of COVID-19 might have seemed as sudden as a slammed-shut door, a new normal will only become apparent over time. Commercial office leases generally run a minimum three to five years, so it will be several years, at least, before we know how many current changes in working patterns and workplace design take hold for the long term.

Of course, there’s still the wild card of COVID-19 and how well we’re able to manage its impact with vaccines and other measures. It’s likely safe to assume, however, that commercial offices won’t be going back to business as usual once pandemic dangers have passed. So electrical contractors, along with others in the commercial building industry, should keep their eyes open to new trends as they arise, and keep their minds open to new ways of meeting their corporate customers’ demands.

About the Author

Chuck Ross

Freelance Writer

Chuck Ross has covered building and energy technologies and electric-utility business issues for a range of industry publications and websites for more than 25 years. Contact him at chuck@chuck-ross.com.

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