At this point, many companies have had their staff working remotely since the start of the pandemic -- and that's hurting office buildings in a very big way.
Of course, there are barriers to having staff return to offices. For one thing, the rollout of coronavirus vaccines has been somewhat slow, with some states not opening eligibility to the general public until the coming weeks.
Furthermore, the science is still iffy on whether those vaccinated against COVID-19 can still contract the virus and transmit it to others. And in the absence of quick, easy, reliable coronavirus testing, many employers may be hesitant to assume the liability of mandating that their staff members put an end to remote work and start gathering under the same roof again.
But one office real estate investment trust (REIT) wants to see office activity pick up. And it's pumping money into a coronavirus testing program in order to make that happen.
What could easy access to testing do for office buildings?
SL Green Realty Corp. (NYSE: SLG), Manhattan’s largest office landlord, is rolling out a COVID-19 testing initiative across its portfolio. Working in conjunction with city and state officials, SL Green has identified at least 21 locations comprising over 200,000 square feet of space that will be made available, free of charge, to be used as temporary testing centers.
If access to testing improves in New York City, it could be just the thing that pushes more workers back into office buildings -- and prompts employers to start signing leases again. Leasing activity has been sluggish in Manhattan as employers have gotten used to the remote- work setup and health-related concerns have prevented a full-fledged return to office life. But by opening up testing, SL Green could help Manhattan's office market improve.
For this initiative, SL Green is teaming up with Mobile Health, a leading testing provider. All of SL Green's nearly 900 tenants will be eligible to receive coronavirus testing beginning in April.
It's worth noting that SL Green does not take workplace safety lightly. Since the start of the pandemic, it's implemented social distancing requirements, mask-wearing, and deep cleanings in its numerous buildings. Not surprisingly, SL Green is also one of a small number of New York City companies that have required workers to return to the office during the pandemic.
When will Manhattan office buildings recover?
The availability rate for Manhattan office buildings rose to 17.2% during 2020's first quarter -- the highest level in at least 30 years. At this point, office building REITs are desperate to see new leases signed, and coronavirus testing could be the ticket to making that happen, especially in conjunction with increased vaccine availability.
By launching its program, SL Green is taking a proactive approach to a widespread problem. If its efforts prove successful, we could see a boom in leasing activity as the Manhattan office scene springs back to life. And that would certainly give office REIT investors something to be happy about.