Ever since the global pandemic took hold, nothing has been the same ever since. Even as we return to an altered version of normality, there are still signs of concern and panic in society. Even the way we shop and go to the gym has changed with masks an ever-present sight. What’s more, employees of many businesses are working from home rather than travelling to an office every day. Among other things, this has impacted commercial real estate as the needs of businesses continually evolve.
While some changes to the current real estate market are just trends, others will leave a more permanent mark. Here’s what professionals in the market should expect in the coming months and years:
The pandemic might have forced businesses into allowing people to work from home, but the fact that many businesses are actually enjoying the arrangement isn’t forced at all. What many have discovered is that working from home suits all parties. Although workers will return to the office, they might not return five days per week as we had previously. It’s not beyond the realms of imagination for workers to enjoy a balance between home working and office working.
For workers, it means working from the comfort of their own home a couple of times per week. For businesses, it means they operate from a smaller property. Rather than having to accommodate 300 people per day, this decreases to 200, 150, or perhaps even lower. For those in the commercial property investment funds real estate market, you need to keep this in mind. Businesses are looking to pack up and hire moving companies to relocate and decrease the space per worker that they lease, and this applies to businesses of all sizes, and in all cities. Businesses in Texas are doing it, and businesses in NY are doing it. Major businesses in downtown New York are hiring the best office movers NYC has, and paying them to relocate their offices. They’ve realised that growth as a business doesn’t necessarily mean leasing more and more space.
Knowing that workers are now comfortable and productive at home, it wouldn’t be surprising to see businesses implementing a WFH policy – even if it’s just one day per week.
The change in mindset from businesses means that they’re also looking for flexibility with their office space. After working from home for so long, employees no longer want a long commute. Consequently, businesses will look for offices that provide flexibility to employees. With easy accessibility, it bridges the gap somewhat between working from home and working in an office.
The End of Traditional Contracts
Traditionally, businesses would lease an office and they would look for long-term contracts to provide stability for all. Now, it seems there’s a shift towards flexible and scalable deals. Businesses seek workspaces rather than an office. Landowners should consider this change in mindset and how it might affect the way they lease. Companies don’t want to be locked into a long-term deal for an office when their needs could change.
Uncertainty and Caution
All in all, businesses are cautious and worried about how their needs could change with regards to office space. Before 2020, nobody predicted the year we were about to have. All over the country, offices were quiet as people took to working on their sofas and home offices. Who knows what could happen in one month, six months, and one year? Ultimately, businesses want freedom, and they want to be ready for whatever comes next.
Businesses will go for smaller offices, flexible offices, and different types of contracts with regards to commercial real estate. It’s up to those in the niche to adapt to the new environment and offer companies what they need!