With many people still working remotely over a year and a half after the outbreak began, many companies will need to decide if the costs of keeping their office spaces makes sense. Tech giants such as Twitter and Facebook announced last year that they would be allowing their employees to permanently work from home, even after the pandemic is behind us. Although we have probably seen a permanent change to the workplace, we will not see an extinction of it. According to CBRE, 42% of companies were offering a hybrid work environment pre-pandemic and that number increased to 61% during the pandemic. The cost savings of eliminating the office environment may be enticing to employers, but there are many benefits for companies to maintain a collaborative workspace. Many young adults crave the social interaction that a virtual workplace fails to provide, and companies have been able to identify decreases in efficiency in the work-from-home environment, recognizing the importance of keeping a physical office space.
Property owners should consider investing in renovations to the designs of their office spaces. The open-air office environment and reduced square footage per employee that was implemented by many companies over the last few years has proved problematic to an industry recovering from the pandemic. Many companies are now seeking to space their workforce out and include more separated workspaces or added barriers. It is possible that with the continued fear of another pandemic, open concept offices may eventually be a thing of the past.
Perhaps one of the hardest-hit industries in commercial real estate is the retail industry. Since the inception of e-commerce about twenty years ago, brick-and-mortar retail stores have been seeing a decline in business. However, with the dramatic increase in online shopping since the start of the pandemic, some retail stores are struggling to stay in business. It has become commonplace to walk around once bustling shopping malls and see vacant units scattered throughout. Owners of this type of real estate have been trying to adapt to this shift by considering repurposing old shopping malls and strip malls into fitness centers, schools, grocery stores, or even housing. Along with the increase in online shopping comes an increased need for warehousing within the e-commerce supply chain. The pandemic caused a rise in online grocery shopping, and with that comes a greater demand for cold storage in particular. With the convenience that online grocery shopping provides, it likely may be a service that remains popular for years to come.
In our ever-changing world, there will always be a need for commercial real estate. It will just be up to property owners to pay attention to trends and find ways to adapt their assets in order to be successful.
Author: Lindsey Luzier, Real Estate Team Member | firstname.lastname@example.org