With the coronavirus causing employees to flee offices and work from home, discovering its advantages along the way, some real estate experts are asking: Will demand for office space in urban areas soon be a thing of the past?
Urban offices were all the rage only a few years ago. A recent CNBC article notes, for example, that in 2018, companies such as McDonald’s, Kraft Heinz and Walgreens opened swanky headquarters in downtown spaces, prompted by tax incentives and access to a vibrant work force.
Then the pandemic came to town.
Now offices and public transport sit empty, and company management and workers are seeing the advantages of employees working from home. “I think the big thing is, people who have commuted in the past are saying, ‘I can be a lot more productive if I can work closer to home,’” one real estate executive told CNBC.
Additionally, millennials are suddenly eyeing wide open spaces. According to the International Council of Shopping Centers, which surveyed more than 1,000 people in midst of the pandemic—from May 22 to May 24— 43% of millennials reported that they were considering moving homes due to the virus, many looking to the suburbs and rural towns.
Real estate experts note that satellite offices are suddenly more attractive, as they allow for parking spaces (vs. employees navigating the dangers of public transportation), ground floor offices (vs. employees having to use an elevator, which people are wary of during a pandemic) and possibly greater proximity for some workers.
While the debate is just getting started, the virus continues to take its toll. Some feel even suburban offices will soon take a hit. “As firms reduce headcount and cut costs to weather the recession,” one real estate investor told CNBC, “office real estate will be at the top of the list to shed…