Soothsayers saw naught but doom for office space as the pandemic shut down America last year, and for good reason. Millions of white-collar workers were suddenly working at home, and turns out a lot of them like it.
But people also work well together in groups. The imperatives for collaboration -- and, presumably, eyes-on management -- are creating a new normal that means there may not be an apocalypse now for office space after all.
Evidence includes a survey by CBRE Group (NYSE: CBRE) that found only 9% of 185 respondents -- all U.S.-based companies -- plan to shrink their office portfolio significantly and that 85% of them expect workers to spend at least half their time in the office.
Positive sentiment from an occupier sentiment survey
Those metrics are from the big commercial real estate services firm's Spring 2021 Occupier Sentiment Survey, and indeed that 9% is a far cry from the 39% who said last year that they planned to shrink their office presence.
Of the survey's 185 respondents, 23% said they're already back in the office, 41% said they intend to return in the third quarter (which just began), and 20% say they will go back in the fourth, the company said in a report about its latest survey.
That means 84% of those U.S.-based companies plan to "return to a steady, relatively normal state of office use" this year, or already have, Dallas-based CBRE said.
Fewer people at a time taking up the same space
Things won't be just like they were before. "Remote work will remain a fixture, but most companies anticipate employees will spend at least half of their time in the office," CBRE said in the report.
Thirty-eight percent of the respondents said their workers would spend three or more days a week in the office while 32% anticipate an equal mix of in-office and remote work, 15% expect solely in-office work, and 7% say workers will do most if not all of their work remotely.
Of course, what that use looks like will vary from firm to firm, but what does seem to be emerging is a consensus that spacing requirements -- think social distancing and all that goes with it -- will result in needing not only the same space as before the pandemic but maybe even more.
"Many companies now recasting the design and function of their offices will find that the square footage needed to accommodate team-centric work, free-address seating, and meeting space often exceeds that previously dedicated to rows of individual offices and cubicles," Julie Whelan, CBRE's global head of occupier research, said in the survey report.
The Millionacres bottom line
This isn't to say office real estate investment trusts (REITs) and many other landlords and managers haven't been hurt by the pandemic shutdowns and cutbacks. They obviously have, but there's still a lot for real estate investors to like about the sentiment in this survey.
For one, CBRE's respondents are from companies making those decisions and, presumably, the very people in a position to act on that positive sentiment. It's not just an opinion poll about the best burger joint in town.
Plus, more people in the office means more people patronizing the retail real estate around those offices, like restaurants and other services. This is a rising tide that can lift a lot of boats.