There are events that change the way the world operates, and completely destroys the old ways. The internet definitely did that, with the move to e-commerce changing the way things are purchased, and making Jeff Bezos a VERY rich man in the process. However, Amazon was the normal extension of the process of evolution in the Economy. Nothing is new.
Prior to Amazon, there was Wal-Mart and K-Mart. Large stores where you bought pretty much everything in one place for a low price. Instead of going to two or three stores to buy shoes, clothing and appliances, you could now go to one place for it all. The big stores drove those mom and pop places out of business, as people went for convenience and price over service and quality.
The outbreak of COVID-19 has now given a chance to again shift the paradigm when it comes to businesses world-wide. With the loss of retail space due to large stores and brands losing marketshare, there is also now the prospect of a change in commercial space as well.
COVID-19 has proven that while there is a need for a physical address for businesses, maybe renting the entire floor isn't something that needs to be done. Conservatively, would you rather pay $35 a square foot for 3,000 sq. ft. of office space (roughly $105,000 a month) plus utilities, internet and phones and computer equipment or pay a lot less than that for your staff to work from home? Smart employers will start offering to pay for cell phones and internet for their employees, issuing them laptops, and letting them set their own times as long as the work is done. Who says you have to work from 9-5 anymore? If the work is getting done, and an owner can do virtual meetings, why not have people work more from home? In fact, the only reason you'd need an office space now would just to have a place for meetings where you have to do face to faces.
As a manager, all I care about is the work being done. If the work is being done properly and on time, I am not at all fussed about where they are. This would have a knock-on effect on other industries, I know, but I definitely see this as something that is coming down the line. Or, if not a full work from home, at least not every day at the office. This would, in my opinion, make life at least a little easier for the worker, and might actually increase productivity.
So if my prediction is correct, and there's a good chance it is since it's already been proven to work, what will this do to the real estate market? Lots of businesses depend on those workers for their livelihoods, such as restaurants and retail. But this will also open up more free time for the workers, as they aren't now tied down to the desk in the office. I've heard friends in the private sector, and where I work, say they stay late at the office to impress the boss with their dedication. If they don't have to do that any more, and it is all now based off productivity, maybe processes become more streamlined.
Also, what if you no longer need a person in a certain location, because that work can be done from somewhere else? Costs for utilities and internet can be done cheaply in some parts as opposed to others, and the cost of living is cheaper as well. If someone is good, and wants to live in the middle of the country rather than work in New York, Washington, DC or even Atlanta, why can't they do that? Or if you have a regional office to run overseas, why would you pay all that money to send someone there to manage, when it can be done through a regional hub with fast internet, cheap cost of living and good connecting flights?
Things are not going to go back to the way they were. This pandemic is a paradigm shift, and just like with the introduction of the internet, it's going to change the way we work in the world.
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