Last month’s newsletter was a continuation in our series about “Has the Nature of Office Space Changed Forever?” In our last issue, we described how many small companies have already returned to their space while large companies are still mostly working from home. What are the implications of this?
What has been a complete surprise to me is how busy everyone is since our last writing. My phone has been ringing off the hook as one customer after another, albeit mostly my smaller tenants, are trying to figure things out.
SMALL COMPANIES ARE BACK!
At many small companies the employees are once again working in the office. While there are some folks that continue to enjoy their new found flexibility to work from home some of the time, for the most part most of my small (under 10 employee) tenants choose to use the office space that they are paying for. This means that they are once again focused on their overhead and are again renewing leases and some are even contemplating future growth and expansion. All this is a good sign for Landlords of the small floor plate multiple tenant building.
LARGE COMPANIES ARE NOT!
By contrast, many of the larger office tenants have not yet returned. When we interview the CEO’s and District Managers at our larger office facilities, it turns out that these folks are not in any hurry to decide. You would think that after 8 months of “work from home” that the large tenants would have some idea when they expect their employees to return, or even IF they expect to return, but for the most part they do not.
To me, this is rather extraordinary. For my entire 40+ year career I have been working with these same decision makers to show them ways to reduce their operating overhead. Now, when they find themselves paying for space that they are not even using somehow, they don’t seem to be in any rush to deal with it. What is going on here?
While the CDC has issued all kinds of guidelines about safe social distancing and ways to keep air and surfaces safe, the majority of companies find that this is all too much to contemplate. The Band-Aid approach of “work from home” seems to be functioning for the short term, but will this work in the long term? How do you train new employees via Zoom? Do teams start to lose cohesion or even disintegrate over time?
We are clearly in uncharted territory. A vaccine is coming soon. Will it be a game changer? Will we ever return to normal? Stay tuned! In the meantime, if you want to focus on that overhead, your tenant advisor can help you. Call us for a free evaluation of your lease and find out why, at Dickstein Real Estate Services, “OUR DIFFERENCE IS YOUR ADVANTAGE®”.
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