Employers taking go-slow approach
Future of office parks unclear as most employees are remote
More cars filled the lots at Capital Region office parks last week than any other week since pandemic lockdowns began in March. But most employers are still not requiring anyone to go back to the office just yet.
Office managers in Stuyvesant Plaza and Great Oaks Office Park in Guilderland, in Corporate Woods in Albany and British American in Latham — which together host businesses ranging from law firms to architects and insurance companies — have seen more people coming into work this month. Estimates range from about one third to slightly less than one half, according to office park operators who speak to employers regularly.
The share of state agency employees who are back in the office remains unclear, as state officials did not respond to requests for comment Friday.
“It has been a real push-pull process for employers going back to the workplace,” said Richard Sleasman, president of commercial real estate firm Cbre-albany. “The office market is by far the most difficult one to assess going forward because of the ability to work remotely that we found over the last six months is actually a fairly efficient and productive way of doing business.”
Employers don’t know yet if they are going to need less space because people are staying at home, or more space because they need more square feet per person to follow Centers for Disease Control and Prevention and state and county mandated guidelines, Sleasman said.
Companies that prioritize
“I just think you’re going to see a lot of procrastination on the part of employers when it comes to both space occupancy terms and, more important, when they bring people back into the office.” — Richard Sleasman president of commercial real estate firm Cbre-albany
the direct interaction with their clients, such as public law firms or architects, seem to be coming in more than larger corporations that have offices all over the country or have a majority of workers only answering phones, said several office park operators.
“Some of the big companies are worried about liability. There is just a lot of anxiety and uncertainty,” said Robert Daly of Picotte Companies, which operates Corporate Woods Office Park. “More people than I thought are kind of waiting for the vaccines. It’s still quieter than I would hope.”
Nationwide, most office workers are not going back and have been told to stay home through the end of the year, according to the Workforce Development Institute.
Commuting plays a significant role in how safe people might feel coming to work. In the Capital Region, most commute by car, often alone in their vehicle. Contrast that with large metros like New York City, where employees crowd onto trains or buses and it’s difficult to maintain social distancing, according to Sleasman, the Business Council of New York, and some local office park operators.
Many employers have implemented hybrid models that prioritize their workers feeling safe over where they actually perform their jobs. Employers are also contemplating what to do about their leases.
“I just think you’re going to see a lot of procrastination on the part of employers when it comes to both space occupancy terms and, more important, when they bring people back into the office,” Sleasman said.
The typical response is to extend a lease short-term, just to buy time, Sleasman said.
But he has seen both extremes happening in the Albany area. One firm working with Cbrealbany decided to shut down its office and experiment with a year without a physical space. Another major client was about to sign a 17,000-square-foot lease but decided instead to sign a 22,000-square-foot lease realizing more space was needed per person going forward.
British American, Corporate Woods and Great Oak Office
Park all had some tenants who asked for rent accommodations, but they aren’t seeing many who want to leave the office completely, even if it is sitting empty for a few more months.
“More of the smaller tenants rolled up their sleeves and were too proud and too driven and too successful in their business to really want to ask for a lot of help,” said Seth Rosenblum, the CEO of Rosenblum Companies, which owns Great Oaks Office Park in Guilderland. “There were exceptions, but largely we didn’t find that a lot of folks have requested accommodations, nor have we seen a lot of offices move toward close.” Sleasman also expects to see more subleasing in the coming months as companies start to evaluate their bottom line.
“For those working from home and expecting to do so long-term there’s hesitation around even thinking about giving up the office space in the long-term,” wrote Vivian Benton, Deputy Director at the Workforce Development Institute, in an email. “Considerations around what to do with all the office equipment and files seems overwhelming right now, even if companies could exit leases easily.”
There have been no outbreaks of coronavirus reported at corporate office buildings, according to the Albany County Health Department.
“I think that’s kind of a little bit reassuring for those of us who want to be back in the office,” Rosenblum said. “I’m not saying it’s never happened or it’s never going to happen. But, you know, you’re hearing about what’s happening on college campuses. And that’s a very different situation. People don’t behave, at least not in any office I’ve ever worked in the same way as they would on a college campus.”