In fact, in August 2019, the Business Roundtable, an organization that includes many of the nation’s leading CEOs, announced that it would no longer be guided by the principle of shareholder primacy.
Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. and Chairman of Business Roundtable said “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”
In the emerging post-pandemic economy there are a number of trends to achieve widespread acceptance including health and safety, changing business interface, and new office standards.
Health & Safety
Health and safety are top of mind in 2021, and companies are going above and beyond simply sanitizing high-touch places like checkout stands and stocked items to keep consumers and employees safe. Companies like Kroger, the huge supermarket company active in 35 states, are trying to stay a step ahead by offering $100 to each employee who takes the COVID-19 vaccine. In total, the company actually spent $1.5 billion in fiscal 2020 to protect employees and the public against the virus.
But Kroger is not alone. Many businesses are making highly-visible health and safety efforts. It’s a way to show that a company is working to create both a safer work and shopping environment. Masks, sanitizer, wipes and plastic shields are everywhere. Better foot traffic patterns, improved ventilation, more flexible work scheduling, improved consumer engagement and additional employee spacing are not short-term trends, they will be with us long after the pandemic ends.
The Changing Business Interface
Once most people are vaccinated against COVID-19 it’s expected that the business scene will gradually return to a new normal. In addition to the virus, fresh ways of dealing with the public will be powered by two fundamental changes.
First, the US population in 1991 amounted to 253.3 million people. By 2021 our population included 330 million people, increasing by more than 75 million people in just 30 years. More people create a need for more jobs. A growing workforce will have to work somewhere. Second, the concept of a “workplace” has evolved.
“Post-pandemic offices,” says Fortune, “will focus more singularly on creating and representing the culture of a company. That mission will drive physical spaces with more breakout rooms and gathering spots. It will dictate who comes to the office and why. Reasons to convene: onboarding, training, meetings, team-building and collaboration.”
Additionally, there are non-business reasons why central office hubs will continue. We are a social species and we generally like to spend time with one another. Cities and suburban office hubs exist because they offer entertainment, dining, commerce, education and habitation. They’re efficient. When disaster hits, they come back. Think of New Orleans after Hurricane Katrina. Or consider Lower Manhattan’s redevelopment after 9/11.
The New Office
No doubt the pandemic has impacted downtown commercial centers and suburban office parks, but the big question is what comes next. Just as the office sector faced tough times in 1991 it did return. Will we again see a relatively short decline followed by new growth?
In turns out that new growth has already started. Consider Manhattan’s One Madison Avenue. It broke ground in 2020, a $2.3 billion office project started in the midst of a pandemic. Why?
According to Jay Badame, president of AECOM Tishman, the project’s builder, “New York’s brightest days are ahead of us and building new office space in this part of Manhattan using the latest in design and technology — with an emphasis on providing a safe, healthy environment for the workforce — is the key to the future.”
As the world continues to adjust, business is finding a way to adapt. Consider the recent refinancing of KBS’ Accenture Tower for example. KBS virtually worked with U.S. Bank, Bank of America and Deutsche Pfandbriefbank, located in Germany,to complete a refinance during COVID-19. Do such systems work? Rob Durand, EVP of financing for KBS, said that despite the challenging environment, “This was a successful large financing…”
Learn more about the Accenture Tower and two additional refinances here.
Additionally, many wonder if new technologies – and their greater acceptance – will cause businesses to move away from traditional office settings. The answer: not likely.
Consider banking. When was the last time you went to a branch? Given online banks, online banking, the growth of nonbanks, and deposits by smartphone, you might think that bank facilities would largely disappear. Instead, we have both fewer banks than we had 15 years ago but more than 6,500 additional bank branches.
In a similar sense, once the pandemic ends consumers will still want the services, products, and jobs that businesses offer. The nature of doing business will evolve, but commerce will continue and that will mean an ongoing need for downtown business centers, suburban office parks, shopping venues, warehouses, apartments, and all the other necessities of modern life.
Or, as Senate Majority Leader Chuck Schumer has said, “office buildings are our factories. They are at the center of economic growth and job creation.”
To learn more about how COVID is impacting businesses, click here.