Following several difficult years caused by pandemic-driven uncertainty, commercial real estate owners are facing new challenges. While more employees have returned to the office, the increasingly popular hybrid work model continues to shape the future of the office property sector as some office tenants have chosen to reduce or sublease their space to accommodate new work concepts.
The fate of post-pandemic office space has been one of most discussed real estate topics of the past two years. One executive who has spent a great deal of time and energy contemplating whether the office has as good a future as past — as well as what it will take to bring companies and their people back to office buildings — is Gio Cordoves, western regional president of KBS.
COVID-19 vaccinations are increasing in the United States, with the country now administering more than 2 million doses a day on average. This is leading to hope that the country can slowly start a return to normal this spring and summer. And part of that process? For many, it will mean a return to the office after more than a year of working from home.
The office. Many of us haven’t been there in a year. Some of us have returned intermittently, fully suited up in a mask and sporting hand sanitizer. Now, a few of us are starting to trickle back—a trickle that will turn into a steady flow as COVID-19 vaccinations gain momentum.
The disruptions of the past two years presented human resources executives with extraordinary challenges. HR executives had to navigate a new office environment. They managed corporate culture with staff working remotely. The administration of benefits and everchanging policies had to be observed.
Now, more than ever, landlords are implementing new policies surrounding sustainability and equality to heighten tenant demand and improve property performance. As companies evolve to implement stronger environmental, social and governance (ESG) principles into everyday company functions, commercial real estate investment company KBS is also expanding into these areas.
Gio Cordoves, regional president, Western U.S. at KBS Realty Advisors, discusses if companies are returning to office buildings and at what scale, what is bringing companies back to office buildings, what office operators have done to facilitate a speedy return and more.
In this lively and insightful conversation with CPE Executive Editor Paul Rosta, DeLuca discusses why the Orange County, Calif.-based firm remains upbeat on the office sector. He details the firm’s investment strategy at a challenging time and offers perspective on the intersection of institutional investors and rising interest rates.
KBS signed slightly more than 2 million square feet in accumulative lease transactions during the COVID-19 pandemic. The transactions comprise a mix of new leases, renewals and expansions, and span across the firm’s $8-billion portfolio of office assets.