News & Insights
Remember when cubicles were all the rage? Office tenant preferences have changed over the years. Today, tenant satisfaction has been redefined as a result of the COVID-19 pandemic and dramatic changes in the labor market.
In the News
For the first time an end to the COVID-19 pandemic is in sight. The daily case count has fallen substantially as more and more people have gotten the vaccine and there’s much talk about returning to “normal.” For millions of workers that means going back to downtown business centers and suburban office parks but make no mistake: the pandemic has left its mark, the new “normal” will be very different from the old one.
Sustainability continues to be a top priority for leaders across the globe, including newly elected U.S. President Joe Biden who has taken a whole-of-government approach to combating the ongoing climate crisis. In January 2021, Biden announced a series of executive orders, including his international and domestic climate change agenda that calls for investing in renewable and clean energy, rejoining the Paris Agreement, and achieving a net-zero emission economy by 2050. Nothing specific in these executive orders appear to point to the commercial real estate sector, but as plans are set in motion these actions will likely set a broader precedent for all industries. Here are some trends to look for as it relates to office:
For the first time it appears that the grip of the COVID-19 pandemic has begun to loosen. Hospitalizations and fatalities are down substantially from the highs seen in late 2020 and early 2021, and as a result it’s become possible to think in terms of a post-pandemic world.
The COVID-19 impact on real estate and the greater economy was severe in the past year, but its effect on consumer behavior and the resulting implications on tenant businesses are still playing out. Companies know they must respond to both evolving trends and sudden economic swings, but adapting to a once-in-a-century pandemic is another matter altogether. Smart corporations are rethinking their organizational and operational models to effectively navigate the demands and opportunities of an ever-changing market.
The first hints of the post-COVID world are beginning to emerge. We may well see in-class education widely available in the Fall, restaurant dining will become increasingly common as we move forward and more workers will return to traditional business settings. As the world begins to return to a new-normal, healthy building and wellness certifications are a hot topic among both tenants and office owners.
It may seem like the pandemic has left a lasting impression on the U.S. office market with low absorption rates and many employees working from home, but everything isn’t quite as it seems. John Adams once said: every problem is an opportunity in disguise. In this case, we are talking about the opportunity in subleasing.
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