From opening up restaurants for dine-in service to loosening restrictions on travel, the country is getting back to normal in a mostly post-pandemic world. However, some things may never go back to “normal” — like the way we work.
Over the past year, working from home transitioned from “temporary” to a new norm many companies have begun to not only accept but openly embrace. Of course, with many employees receiving the go-ahead to work from home for the foreseeable future (or at least work from home most of the time), what will happen to the big, roomy office spaces their employers no longer need?
In a recent Forbes article, The Impact Of A Hybrid Work Environment On Real Estate, Co-Founder & CEO of Replay Listings Rodolfo Delgado predicts a “downsizing” trend within the commercial real estate space, potentially opening up opportunities for commercial real estate agents to help newly-hybrid companies navigate the relocation process.
Hybrid Company Trends So Far
Right now companies like Microsoft and Google are leading the way with flexible spaces designed to accommodate fewer in-person employees while still including virtual employees in roundtable meetings.
Google’s “Campfire” rooms are circular to make it easy for everyone to be addressed, while Microsoft is including eye-level cameras and screens on the walls to allow employees to maintain eye contact with their teammates, even if they’re remote.
And if you’re wondering if the need for office space will ever phase out completely? It’s not likely.
Delgado also considers the fact that in some metropolitan areas where the majority of living spaces are fairly small, employees may always want the option to work at a physical office outside their home if it’s safe.
Plus, some companies and roles need in-person dynamics for better performance.
However, overall, hybrid companies are looking for less square footage, and easily rearrangeable rooms to accommodate a fewer and inconsistent number of in-person employees.
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How Will the Hybrid Model Affect Commercial Market Value?
Since now-hybrid companies may rarely need to host the entire team in person going forward, Delgado estimates hybrid companies will “recalibrate” the amount of square footage they lease in their buildings.
As a result, leasing revenue will decrease, which also reduces their buildings’ market value. In some cases, landlords may need to repurpose some of the building space to use as residential housing in locations where it would make sense. In the worst-case scenarios, some commercial landlords may be forced to foreclose.
What This Means for Commercial Real Estate Agents
As one might expect, the commercial real estate industry needs trusted advisers now more than ever.
If you’re a commercial real estate agent, now is the time to reach out to your sphere of influence to see how your clientele is handling the back-to-work transition and whether or not they need help filling vacancies or planning for repurposing.
It may also be a great time to reach out to companies directly to see if they’re thinking about downsizing or relocating and helping them navigate the process.
The bottom line is, unprecedented trends like these will continue to emerge, and staying current helps position you as an invaluable asset to key decision-makers.