There's a reason so many more people are working remotely nowadays than before the pandemic began. Gathering hundreds of people under the same roof is hardly a secure prospect when the coronavirus outbreak is still raging -- especially now with the more highly transmissible delta version at the forefront.
In fact, many companies have been forced to postpone their office reopening plans due to the ongoing surge of COVID-19 cases. And that, combined with the events of the past 18 months has done a number on office real estate investment trusts (REITs), especially in major metro areas like New York City.
That said, office buildings with one key feature might enjoy stronger return rates in the near term. And investors looking to get into the office building space may want to focus on properties that offer it.
It's all about outdoor access
Outdoor spaces -- such as terraces, courtyards, roof decks, and balconies -- were often regarded as appealing office building amenities before the pandemic began. But these days, outdoor space and biophilic design have effectively become essential.
Public health experts seem to universally agree that the safest way for groups of people to gather in person during the ongoing pandemic is to congregate outdoors, where the likelihood of COVID-19 transmission is significantly reduced. So, going forward, we're likely to see more design plans for office buildings that incorporate some type of outdoor space.
Not just a pandemic-inspired trend
Interestingly, real estate investors and developers were focusing on outdoor spaces for office buildings even before the pandemic began. In late 2019, months before the outbreak exploded, commercial real estate brokerage firm CBRE (NYSE: CBRE) conducted a survey and found that nine out of 10 office buildings under construction in Manhattan featured some type of outdoor space.
Meanwhile, 18 of the 24 buildings built during the 2010s also had outdoor space. The trend was particularly prevalent in new construction in Midtown South, an area where technology companies have continued to take up residence.
The reality is that outdoor space can be essential for employees not just during a pandemic but also during normal times. Having the option to step outside for extended breaks can work wonders for workers' mental health.
And even when there isn't a destructive virus like COVID-19 to worry about, allowing companies to conduct meetings outdoors could help prevent the spread of less serious illnesses, such as the common cold, that have the potential to cause worker absences and disrupt workplace productivity.
The Millionacres bottom line
Real estate investors interested in office buildings may want to focus on properties with outdoor features going forward. Granted, given the beating office buildings have taken in the past year and a half, investors may not exactly be clamoring to own a piece of that particular sector.
But eventually, office buildings are apt to stage a recovery, and in time, they could become more appealing viable investments. At that point, looking at properties with terraces, courtyards, and other outside features will make a lot of sense.