Work From Home Likely a Limited Headwind
Much has been said and written about the death of the office building in the wake of office space closures required as part of the response to the COVID-19 pandemic and the associated long-term impact of work-from-home (WFH) options; some of this commentary has been from companies in industries such as information technology (IT) that stand to benefit a good deal if WFH becomes the new paradigm. We think there will clearly be an increase in workforce locational flexibility, with the potential use of satellite offices in suburban locations and possibly “hoteling” (where employees don’t have a fixed desk, but use an available workstation on those days when they are in the office) to supplement a somewhat higher percentage of WFH activity. However, like the premature reporting of Mark Twain’s death, it is far too early to make any well-grounded judgments on the degree of impact that this recent situation will have on future office demand and space configurations.
The pandemic and subsequent recession have obviously created short-term demand challenges for office properties, but we are skeptical that WFH will have a severe long-term impact on office usage for several reasons
Productivity: WFH productivity was solid as the lockdowns began and could go higher in the short run as bandwidth and hardware capacity continue to come on-line. People have been intensely focused on work during this crisis both to save their jobs and because “There Was Nothing Else To Do.” But eventually we will have vaccines, effective treatments, and/or herd immunity, at which point health/safety reasons for WFH will substantially diminish. And when life begins reverting to normal, distractions will grow such as shopping and errands, daytime social gatherings and taking the kids back and forth to school and activities. The survival of employers and jobs will become much
