No More Work Buildings?

[WLG1952]

Well, we have students doing their studies at home. We have workers working from homes. If nothing else, this is evidence of a cost saving measure.

Look at all the money businesses, and school districts could save, by not having to maintain large buildings, on a regular basis. Government offices?

Sure, school studies like music, shop, and sports would require some students to go to school for few hours each week. Alot of businesses could replace their huge buildings with smaller ones. Some would no longer need a building it seems. Just a store room to store paper work, and equipment.

Heck, you can now buy a car, while eating a sandwich, in bed if you want.

My last 3 doctor's appointments have been done by phone.

Pharmacies, with just a phone call, are mailing my meds to me. This is definitely a bigger change that is going to take place at some future date.

Any thoughts?

 

[NullNomad]

I think its certainly on the table. on a side note, I find it ironic that IBM some 20-25 years ago was all about the remote work force. They did so for the cost saving measures you mention. 2-ish years ago, IBM reversed that stance. They basically said if you were within 90 miles of an office you had to come in or relocate to the central location that your manager/business unit worked from or take a severance package and lose your job.

 

[Scorp]

I've seen the commercials touting that you can now purchase a vehicle from home... it's been asked for for years and the answer is usually "paperwork"... "state law requires..."

I'm not going to try to speak for dealerships but I think that, as soon as covid-19 settles, the purchase from home options might "disappear" and the manufacturers will try to lure people or lead or direct them back to dealerships.

I see the above as dealerships sometimes put out lots of money in their franchises and they may try to protect their investment but the proverbial horse has been let out of the barn and it's not going back in with regards to having to set foot on a dealership lot to purchase a vehicle.

total speculation on my part

 

[DG_1234]

Well, we have students doing their studies at home. We have workers working from homes. If nothing else, this is evidence of a cost saving measure.

Look at all the money businesses, and school districts could save, by not having to maintain large buildings, on a regular basis. Government offices?

Sure, school studies like music, shop, and sports would require some students to go to school for few hours each week. Alot of businesses could replace their huge buildings with smaller ones. Some would no longer need a building it seems. Just a store room to store paper work, and equipment.

Heck, you can now buy a car, while eating a sandwich, in bed if you want.

My last 3 doctor's appointments have been done by phone.

Pharmacies, with just a phone call, are mailing my meds to me. This is definitely a bigger change that is going to take place at some future date.

Any thoughts?

Technology advancements are not always a good thing. For example, during the past 20 years technology advancements have eliminated millions of (formerly) human occupations, and the current trend is to diminish/eliminate office buildings, store fronts etc... So, I think it's fair to question whether technological advancements might in some ways be changing society for the worse.

 

[Golf Ghost]

This has been a huge discussion for us. We have three small offices in our portfolio (less than 2000 sq feet). We've never had issues filling them, but leases are generally short. Speaking with the commercial realty firm that we work with, they predict that a lot of offices will downsize after this. Offices may see rotational work at the office, vs. having everyone in every day. Huge costs saving, allows companies to be in a location that they want to be vs. a space that fits them.

Going to be a lot of chances in the commercial real estate world over the next year or two as leases come to an end and companies look where they can save.

 

[Bjornjorg]

I think and agree that this situation for businesses, schools, and government has forced some to think of how to provide services in a different way. It's been said necessity is the mother of invention, but in this case I think it's the mother of change. There will be changes coming to all businesses and services from this. The question for me is how much sticks when the pandemic is over.

 

[Luchnia]

In a large number of work cases, people haven't really needed to drive to a building and work for years (they just do it that way), but it is just the way most businesses operated. I expect after this you will see a lot of change and especially with older more vulnerable workers that can work from home. I would have opted out years ago for saving all the expenses for driving.

 

[RealPretendPsychic]

I think the virus will spur a lot of that discussion. I’ve seen managers fight tooth and nail against remote work and I personally have no interest in being 100% remote. My preference would be somewhere in the middle.

 

[zbeekner4]

I’ve had this discussion a lot. I think it’ll certainly promote more work from home employees even when things go back to “normal.”

I also see the point about dealerships and other businesses that have been forced to go remote. It’ll be useful to have that option now and businesses that were forced into it likely won’t go completely back to way things were. Truthfully, I hate dealerships and dealing with the crap of “let me go see what my manager says.” Send an email and say here’s my trade in and I want this car. It’ll also drive competition since I can price out 5 different dealers and their cars while sitting on the couch.

 

[DataDude]

Well, we have students doing their studies at home. We have workers working from homes. If nothing else, this is evidence of a cost saving measure.

Look at all the money businesses, and school districts could save, by not having to maintain large buildings, on a regular basis. Government offices?

Sure, school studies like music, shop, and sports would require some students to go to school for few hours each week. Alot of businesses could replace their huge buildings with smaller ones. Some would no longer need a building it seems. Just a store room to store paper work, and equipment.

Heck, you can now buy a car, while eating a sandwich, in bed if you want.

My last 3 doctor's appointments have been done by phone.

Pharmacies, with just a phone call, are mailing my meds to me. This is definitely a bigger change that is going to take place at some future date.

Any thoughts?

I work for Humana which is one of the largest health insurers in the US. We have been trying to get people to adopt telehealth for 2-3 years and mail order pharmacy for a decade to save money across the board on healthcare. 80% of our members are Medicare members to so our savings are government savings too. This has been a huge boon to those efforts. The communication from the C-suite is to figure out how to keep everyone using those services when this is over.

 

[wubears71]

Office space will be condensed. There will still be plenty of offices, but when you need to go into the office, you "check out" a cube or an office. KPMG has been doing it this way for decades since the majority of their staff works at client sites.

I always argued that forcing people to sit in an office from 9-5 is pointless. Any office work for me can be done as easily with my feet in the sand on a beach as it would being physically in the office. If you work for a micro manager, it causes them to lose their ****, but if you work for someone that actually trusts and empowers you, it's a non-issue.

 

[DataDude]

I think there is going to be a huge depression for commercial real estate. There will be a lot of empty retail and office space as we move to a new normal. I think the residential real estate space is going to absolutely blow up though. People are now acutely aware of what they do not like about their current home and I think a lot of people will want new homes when they are on the other side of this. I also think this will lead to further migration away from the super dense Northeast and to areas like the Southeast, Southwest, and Texas. The work from home boom will be a huge problem for San Francisco real estate. I think a lot of people out there are going to say I am out of here. I will do my job for the same salary at home somewhere that I can buy much more for my $'s. I mean I live in a 3500 square foot house with all the bells and whistles with a golf course in my backyard that cost $390,000. In SF in 2018 when we visited the cheapest listing in the whole city was a 350 sf one room studio for $650,000. It can't be worth that much to live there.

 

[VegasMav]

As @wubears71 stated, there are companies called "virtual offices" like Regus that rent offices. This could be the new normal once companies realize that it's more cost-effective than leasing and incurring all the costs associated with leasing such as utilities. It also depends on what kind of industry. For sure call centers, customer support, travel agencies, and any other types that don't require face to face meetings. I can see more video conferencing companies like Zoom and Skype to start popping up.

The nice thing about working in real estate is that I can work from anywhere, including my car. Since everything is done online and in the "clouds", working virtually is essential. I only go into the broker's office when I need to get out of the house or if I need to print flyers or anything in large quantities. Other than that, all docs can be signed electronically.

We will see a change in how we all do business, especially those in office buildings. It could mean fewer commercial leasings and more home property sales for me if many decide that working from home will be the new normal. Only time will tell.

 

[BriMac]

Totally agree with the thoughts already mentioned. One thing, on the flip side, that I found interesting:

Sq feet per person has been decreasing over time to cram as many fannies in an office space as possible (I.e, fewer individual offices, open seating concepts). With some forms of social distancing needed even after this is done, folks in an office will be more spread out. That should partially offset the overall decrease in office space.

 

[PKorf]

there is absolutely no way they will not have "work buildings".......thats nuts. just doesnt make sense

 

[redneckwop]

We have talked about this as well & we may possibly seem remote working in the future. But I also believe that we are a society that needs that face to face interaction to a point. Some things it easier to get up & go talk to someone directly then by email or phone. Just my 2 cents that probably only worth half that.

 

[G-Man]

We moved buildings a while back 2013ish... They downsized quite a bit in actual space. I think the next move will be even smaller and encourage a work from clients and work from home adoption.

 

[Nappy]

I know for a fact that my company is exploring keeping a lot of the workforce at home going forward. 90% of our buildings are rented/leased and they are seeing us actually increase in productivity at home.

I've always said I'd be good with working at home if it was even playing field. By that I mean that I've seen some co-workers who worked from home get passed over for promotions or even get let go because they never had much face to face contact with management.

I have a feeling I might be here to stay going forward.

 

[JB]

there is absolutely no way they will not have "work buildings".......thats nuts. just doesnt make sense

I am 100% with you here.

 

[GraniteRoost]

It's funny this topic came up. Our manufacturing company was bursting at the seams, with zero extra space after an big expansion in 2010 was used up and then some. We just built a second three story office building across the street for all sales, marketing, admin, electrical engineering.. basically most of the "carpet dwellers" as we jokingly call them (office carpet vs. concrete manufacturing floor). The building is zoned foir office use only, we can't manufacture anything in it due to legacy zoning and and bunch of other stuff, so all of our actual manufacturing has to happen in the old plant.

Well, when the COVID shutdown happened, turns out ALL of those folks across the street are working from home, and the only three people in the building are a receptionist answering phones, a Director of Sales, and one sales guy that has a slow home internet because lives in sticks Vermont. Arguably, the slow internet guy could be upgraded to different internet provider, and everything in that building could happen remote.

I'm not saying that we should not have built the new office tower - it is a wonderful space, complete with training center for our customers when they visit. It in many ways was badly needed. But this situation has shown to a large extent that these is another alternative... our sales and marketing teams are rolling just fine with remote access.

 

[Reframmellator]

Technology advancements are not always a good thing. For example, during the past 20 years technology advancements have eliminated millions of (formerly) human occupations, and the current trend is to diminish/eliminate office buildings, store fronts etc... So, I think it's fair to question whether technological advancements might in some ways be changing society for the worse.

"Progress might have been all right once, but it’s gone on too long." - Ogden Nash

there is absolutely no way they will not have "work buildings".......thats nuts. just doesnt make sense

I think the concept of "hoteling" will be refined, and while offices and conference rooms will not go away, they will be right-sized. Companies like mine with with a seriosuly overcrowded HQ will use this opportunity to find a way to use WFH to make the space fit the business needs without finding more office space.

 

[Edsland]

No way would it work for school, wait till the next time they report to a classroom and find out every kid is all over the place as far as studies go. Some really try, some not so much and a lot in the poorer area's don't even have Internet to do any of the studies.

 

[PuffChippy]

Totally agree with the thoughts already mentioned. One thing, on the flip side, that I found interesting:

Sq feet per person has been decreasing over time to cram as many fannies in an office space as possible (I.e, fewer individual offices, open seating concepts). With some forms of social distancing needed even after this is done, folks in an office will be more spread out. That should partially offset the overall decrease in office space.

Maybe that will be one good thing that comes out of the corona virus panic - the death of open workspaces. That was sold to workers as a benefit to their collaboration when it was really just an excuse to cram more and more bodies into less and less space because $$$.

 

[NoLine]

As @wubears71 stated, there are companies called "virtual offices" like Regus that rent offices. This could be the new normal once companies realize that it's more cost-effective than leasing and incurring all the costs associated with leasing such as utilities. It also depends on what kind of industry. For sure call centers, customer support, travel agencies, and any other types that don't require face to face meetings. I can see more video conferencing companies like Zoom and Skype to start popping up.

The nice thing about working in real estate is that I can work from anywhere, including my car. Since everything is done online and in the "clouds", working virtually is essential. I only go into the broker's office when I need to get out of the house or if I need to print flyers or anything in large quantities. Other than that, all docs can be signed electronically.

We will see a change in how we all do business, especially those in office buildings. It could mean fewer commercial leasings and more home property sales for me if many decide that working from home will be the new normal. Only time will tell.

I’m not sure I agree about the Regus model or the co-working schemes like WeWork/Industrious/Covene/etc being more successful, all were blowing through VC money during the heyday. Companies are not going to risk placing their employees in environments they can’t control, not because they care about their people but because their insurance carriers won’t allow it.

The open plan office has been in place for twenty years, with tweaks, refinements and ever shrinking RSF per employee. Of course 20 years ago you could lease space in Uptown Dallas for $20/sf and now that’s $60/rsf or $60/rsf in Mid-town NYC and now that is $130/rsf so you can quickly solve for the verb.

When you read Kinsey surveys on the workplace the number 1 complaint is the open plan environment. Employees hate it. The truth is though that it really hasn’t driven down utilization on a 1:1 ratio because companies have repurposed some of the space savings into more conference rooms, huddle rooms, break areas. Now the open plan environment gets a nice $1,500 to $2,000 standing desk and a $1,200 chair. You have to pay to get rid of the desk when the lease is up or you renovate your space.


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[Joshnoble01]

We had a department meeting regarding this today. We have some people worried about coming back or others chomping at the bit to get back asap. At a minimum I think we will see more rotation partial work weeks from home. I think long term companies will look more to hire employees that can work remote and we will see a lot of changes come out of this.