When remote work became an instant by-product of the coronavirus pandemic, many people figured it would last a couple of months at most. Little did many of us realize that almost a solid year and a half later, a large percentage of the workforce would still be working from home.
That trend has done a number on office REITS (real estate investment trusts), and at this point, it may have some investors worried. In some markets, like New York City, office building vacancy rates hit a record high during the pandemic. And while some companies are now starting to call workers back to the office, others are making plans to keep workers remote in some capacity on a long-term basis.
That could be devastating to office REITs. Companies that retain even a partial remote setup may opt to downsize office space or pursue cheaper lease opportunities that hinder office buildings' recovery. But if there's one thing office REITs have going for them, it's that younger workers may be particularly drawn to office life -- and may soon really start pushing to get back to it.
Could younger workers be the ticket to an office REIT revival?
Working remotely has its clear perks -- more flexibility and savings on commuting costs. But it also has its drawbacks, like limited productivity and isolation. In fact, JPMorgan CEO Jamie Dimon has been quoted as saying that working remotely "does not work" for young people or "those who want to hustle."
Several surveys support this line of thinking. A recent Microsoft survey found that 60% of Gen Z respondents are barely surviving or are downright struggling in an age of remote work.
Meanwhile, in a recent PwC survey about work-from-home productivity, 34% of respondents with five years of experience or less were more likely to feel less productive working remotely compared to 23% of all respondents. And in a recent Fortune survey, 43% of 18- to 24-year-old workers have felt less productive on the job since they started doing it from home (whereas only about 25% of workers 45 to 64 feel similarly).
While employees of all ages might struggle with remote work, younger folks may be more apt to miss it. At this stage of their careers, younger workers are losing out on the opportunity to learn from others and network by doing their jobs in isolation. Plus, because younger workers are less likely to be married or have children, they're more likely to be drawn to the social aspects of office life. Those extend well beyond mingling with colleagues at the water cooler. Rather, they can run the gamut from team lunches to after-work happy hours and other opportunities to build not just professional connections but actual friendships.
For this reason, younger workers could help office buildings recover sooner. If younger employees make it clear that they want to get back to in-person work and they embrace those opportunities once they're presented, companies may start to rethink their long-term policies and, at the very least, take steps to ensure that anyone who wants a permanent desk at an office has access to one.
The Millionacres bottom line
Of course, this isn't to say that all younger workers want to return to an office. Many, in fact, may want the flexibility to try out new cities and do their jobs from different corners of the country before they're at a stage of life where they're ready to put down roots. But still, based on the aforementioned surveys, it's clear that a large number of younger remote workers are struggling. And if they make that clear to their employers, it could pave the way for a more robust return to office buildings on a national scale.