Clouds hover the downtown Houston office market. Photo credit: Ralph Bivins of Realty News Report
HOUSTON – (By Ralph Bivins, Realty News Report)
Open offices are dead.
It was a short-lived trend, really. As a pop culture trends go, the open-office design trend lasted longer than disco music, but not as long as VHS cassettes home movies.
The idea of open offices sounded pretty good. The workplace organizational gurus said employees needed to collaborate and henceforth there would be greater communication and from that more creativity and innovation.
So companies ripped out cubicles and went to the open environment workplace. Skyscrapers had radical interior surgery. The newfangled open offices of the 2010s had booths, cafes, and hotel-like lobbies. Employees could be refreshed by taking their laptop to another room with another chair, another view. Some people worked at long bench-like office furniture.
But our tragic coronavirus pandemic will has changed all of that. Open offices are a dead concept. The only question is how long it will take to remove the carcass.
“Social distancing is here to stay for a little while at least” says Robert P. Fields, president and CEO of Houston-based Patrinely Group, a developer of office towers and other commercial property. “People have been getting closer and closer together. I think there’s been a reassessment of that.”
The pandemic has become a great experiment in working from home. Companies will know for sure how well it works when our nation finally gets back to normal. Some have theorized that a great wave of abandonment will plague office towers, particularly in dense cities like New York where mass transit prevails and office rents are sky-high, to boot.
Some of the new workplaces of recent years had eliminated permanently assigned desks. Employees stored their materials in a locker overnight and worked at a different desk the next day. How popular is that going to be in the Covid-19 era? Who knows who sat at your desk the day before? Did they sneeze on your chair?
Downsizing can be a siren song to the accountants. Saving money on rent can be a powerful motive for office building tenants. Smaller office footprints are cheaper. The pandemic-inspired working from home trend leads to reduced occupancy, some industry professionals predict. And with a recession in full force, a contraction of office demand is likely in the nation, perhaps worldwide.
Companies shrinking their footprint is a certainty? Fields, a real estate developer and licensed architect, offers an alternative viewpoint. As companies have time to reassess their utilization of space, the demand for social distancing could mean more demand for bigger office spaces as tenant companies – and employees – reject the sardine-like trends of the past.
“I would agree the current social distancing protocols suggest we’ll need more real estate if our work spaces were fully occupied before the pandemic,” said architect Dean Strombom, principal with the Gensler architecture firm in Houston. “On the other hand, Gensler’s research pre-Covid19, shows less than 50% of workstations and 20% of offices were occupied at any given time in the workplace. I suspect that smart space utilization with tailored space for the task at hand, combined with some amount of working from home in the future, will balance out the perceived need for more real estate due to social distancing.”
The need for personal interaction, team-building and creative synergy is real and it’s not always easy to accomplish it through Zoom virtual meetings.
“Our research suggests that employees have found many benefits from working from home, but in general productivity is highest when working from home is limited to about 20% of the time. Colliers Global Work-from-Home Survey indicates 70% of us would like to work 1-2 days a week at home. Many of us are feeling isolated, and 61% are experiencing productivity decline when restricted to working exclusively at home,” Strombom said.
With upcoming softness in the office market in the economic downturn, expanding office space will be more affordable as rental rates fall.
If rents are cheaper and airy offices are safer, a case can be made that tenant companies want to expand their office footprint.
“Long-term, organizations will redefine what maximum occupancy should be,” said a CBRE coronavirus report from the United Kingdom. “In some cases, organizations may need to de-densify office space. We’ve always pushed for organizations to consider a balance of enclosed and open spaces. Even with the increase in remote working, some organizations may need to increase their footprint to get to a more appropriate, socially acceptable balance.”
And work-from-home may be working out fine for employees for now. Currently they are working online with familiar co-workers and friends. But turnover always occurs and employees depart. Team work with a team you have never seen before, may not be the same in the future.
May 18, 2020 Realty News Report Copyright 2020