The Tide Is Turning Away From Shrinking Office Footprints
When the pandemic hit in March of 2020 and everyone started working from their homes no one was certain what the office space world would look like in the future. Would the Willis Tower be turned into residential condos, would Chicago’s central business district become a ghost town?
Talking with tenants, brokers and employees over the last 12 months we think a hybrid working environment is the most likely scenario in the short term and a small growth of WFH may take hold over a longer period. Many companies require security on their work-product which is made more difficult with multiple remote locations and many managers will still want to keep an eye on their employees.
It may be too early to speculate, but recent commercial activity shows things have definitely picked up. There is still a need for office space. The question is how will it be configured. Only time will tell.
March 25, 2021 Matthew Rothstein, Bisnow East Coast
As businesses around the world grow more familiar with the pros and cons of remote work, their commitment to the office is deepening.
Multiple surveys conducted in the past month indicate that office-using companies do not intend to shrink their footprints. Only 17% of CEOs surveyed by KPMG reported any intent to cut back on office space, down from 69% in August, Reuters reports. A survey of accounting firms by the American Institute of CPAs found that 72% plan no change in their office usage against 20% that plan some sort of reduction, with 7% planning to grow their footprints.
Part of the increase in the share of companies not planning to shrink their footprints could stem from such companies having already executed givebacks. Net absorption fell to its lowest annual total on record in 2020, according to Colliers‘ national fourth-quarter office report.