In the United States the vacancy rate in the office sector of has increased 9% in the second quarter of 2020 over the first quarter of 2020 in response to the coronavirus. It is up 15% over the same time last year and expected to continue an upward trajectory as stated by Statista.com.
Some fear, things will never be the same again.
But what is fueling this theory?
Why not just go back to normal after we get out of this mess?
The answer In short is… technology.
The pandemic actually forced a nation, correction, the world, to embrace new technologies in order to continue doing business as best they could. People who had never been on a Zoom call for a meeting or used LinkedIn to drive new business were now forced to explore new horizons.
More and more professionals are learning how to leverage LinkedIn to generate leads and build a network, many have turned to automation software like BigLinker.com to get the most from the service. They are creating connections automating messaging and getting meetings. These meetings are taking place on virtual meeting software like Zoom.us. No traffic jams, parking costs, expensive lunches or wasted time.
As a result, a portion of the work force is expected to remain home based even as things begin to reopen and resume a semblance of normalcy.
Some company leaders have realized that they can leverage this trend to improve their bottom line. They are seeking to eliminate half of their real estate costs, even if production drops 4% and the savings on rent is 18% or even higher. It’s a no-brainer.
While there is a large population of individuals who want to get back in the office a portion will not return.
So, what will that look like?
Many firms are discussing splitting their team and alternating days in the office and days at home to eliminate half of their space requirement. Some are remote working different departments while housing others in office space to mitigate their space needs.
Naturally this will have an economic effect n the office sector. While A office product will likely see little change B and C buildings will see a devaluation as evictions and vacancies increase and rents will follow as buildings compete for viable occupants.
It’s a bumpy road ahead for office but where there is change there is opportunity.