Read this office report: It is not an obituary
Reports of the death of the office are greatly aggerated. That's an old word, aggerated. It means "heaped up."
Whether reports of the death of the office are exaggerated — overstated — remains to be seen.
In the meantime, they're still piling up, and with the coronavirus socking it to us again, and likely to get worse than it's ever been — right up until a vaccine is available — office obits are likely to keep coming.
The office workplace dead? No, but definitely diminished. It was in gradual decline, with a nascent "work from home" movement even before COVID-19. "Work from home" is a real thing now, with an acronym even: WFH. (Not to be confused with WTH).
The coronavirus won't do the office in completely. But the pandemic is bringing permanent change to the workplace as surely as tuberculosis did in public spittoons a century or so ago.
Here are some highlights of the changes a (square) foot, according to "Emerging Trends in Real Estate 2021," the annual report — based on hundreds of interviews with property specialists — on investment prospects, by the Urban Land Institute and PwC (Price water house Coopers). It's available at www.tinyurl.com/ETRE21.
• "The WFH experiment has gone better than most managers and employees had expected, since new teleconference tools and advanced information technology systems have allowed for effective communication and collaboration
(so far). ... The extensive use of Zoom, WebEx, and other online meeting platforms has shown that many office-using businesses can communicate effectively and be productive in a virtual environment."
• "WFH can be productive and collaborative, potentially allowing companies to reduce office footprints. ... Still, a number of interviewees expressed concerns about WFH's impact on collaboration, innovation, onboarding, training, and company culture. One CEO observed that 'people can't rise in an organization in a remote-only setting.'"
• "In-person workplaces are critical for company culture, innovation, onboarding of new employees, and training. Plus, WFH may be a challenge for younger and lower-income workers due to space and connectivity issues at home. ... (But) companies that plan to go back to a pre-COVID office setup may face short- or mediumterm complications when they start to reopen. ... Some employees, particularly older ones or those with health issues, may have ongoing concerns about the safety of commuting by public transit or being in an office, particularly if vaccine participation is lower than expected."
More than 90% of those interviewed for "Emerging Trends" agreed that, in the future, more companies will choose to allow employees to work remotely at least part of the time. Many companies have surpassed "flexibility" to "fluidity" regarding the characteristics and location of the workplace.
The coronavirus has probably stopped, if not reversed, the trend toward allocating less space per office worker, but WFH could make it a wash by offsetting office space needs in general.
"Emerging Trends" reported that 63% of respondents said social distancing recommendations will require office tenants to allocate more square feet per worker than before the coronavirus, but that "many office tenants will use WFH to shrink their footprints as a cost-saving measure, as well as an employee benefit."
Further, "WFH may lead to different models of how companies lease and use office space. Some companies may move from a consolidated model to a hub-and-spoke system with satellite offices in suburban areas. At the margin, this favors suburban markets over central business districts."
So, the office is down, but not out, and different, probably for good.
"History suggests that offices will remain the dominant location for most white-collar employment, but the pandemic has taught us that there is a definite new variation now in the mix," the report concludes. "As an institutional equity investor commented, 'There seems to be almost an optimal productivity situation where working in the office three or four days a week and then remotely one or two days a week is actually more productive than working in the office five days a week or being out of the office all five days of the week; we're discussing greater flexibility around working remotely.'”
Flexibility, yes: Bend to keep from breaking. But I like "fluidity" better: Depending on how office bosses deal with their office people, it still could be sink or swim for the office workplace.
Real Estate Editor Richard Mize edits The Oklahoman's Real Estate section, and covers housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com. Contact him at rmize@oklahoman.com. Please support his work and that of other Oklahoman journalists by purchasing a subscription today at oklahoman.com/subscribe.