May 21, 2020
The entire commercial real estate industry is asking the same question – what will become of the office sector post-COVID?
For nearly two months, the majority of US business have shifted toward a work from home (or #WFH) model. While some companies will return to business as usual in their physical offices, others have quickly discovered the benefits of allowing employees to work remotely. And, not only does the model ensure the safety of employees, it also saves businesses hundreds of thousands, if not millions of dollars annually.
Many executives and business owners are realizing the adoption of video conferencing and teleworking has resulted in the same (or improved) performance as seen in the traditional office environment. In recent weeks, many corporations have announced long term or permanent remote work – with tech leading the way in the WFH transition.
According to an article from Commercial Observer, “Twitter will allow all of its 5,000 employees to work from home permanently, “even after the emergency coronavirus measures that forced workers out of its offices are lifted.” Twitter has over 35 offices around the globe, including 215,000 square feet occupied by its headquarters in NYC. Whether or not all 35 offices will reopen by the end of the year is unknown. But, it won’t be until at least September until Twitter plans to gradually allow employees to return to the office.
In late April, Zillow announced that it will allow its 5,000 employees to work from home for the remainder of 2020 – according to an article from TRD. “My personal opinions about WFH have been turned upside down over the past 2 months,” Rich Barton, CEO of Zillow, tweeted Friday. “I expect this will have a lasting influence on the future of work … and home. Stay safe.”
Google recently announced it will allow its employees to work from home for the remainder of 2020. With over 100,000 employees and over 70 offices in 50 countries, there’s no doubt the company’s WFH announcement will have a strong impact on the office market. According to The Washington Post, Google CEO Sundar Pichai sent an email to employees last week, telling them that the “ramp back to the office will be slow, deliberate and incremental.” With a few exceptions, most Google employees will work from home full time for the foreseeable future, “potentially” until next year, he said.
The tech giant is allowing employees the option to work from home through October. “What we recognize is that economies are going to need to be opened gradually by turning a dial rather than flipping a switch,” president Brad Smith told The Washington Post. “And as economies do that, I think we have a responsibility not only to adhere to the public health guidelines, but to be slower than others in bringing people back simply because we can.”
CEO Mark Zuckerberg revealed that the company is moving towards permanent remote work for at least half of its employees in the next five to ten years. Facebook announced this week that upon reopening offices on July 6th, they plan to reduce occupancy to a max of 25% and will implement additional safety measure for those returning to Facebook locations. In an interview with The Verge, Zuckerberg said he plans to make at least a partial return to the office. The role of CEO has historically required travel and in-person meetings that might not be possible to do online. But Zuckerberg said that he, too, would likely continue to work from home more than he did before the pandemic.
So, what will become of office space post-pandemic? We’re relying on comprehensive, real-time commercial real estate data to monitor office trends and behaviors across the country. Get DataQu for access to up-to-date CRE data and stay ahead of the office space evolution.