In May, the Centers for Disease Control (CDC) had some good news for vaccinated Americans -- feel free to ditch your masks and go about your lives like you did before the pandemic. The news came at a time when studies were pointing to strong vaccine efficacy, and inoculation rates were rising at a steady level.
But then vaccinations started to taper off over the summer. At the same time, the highly contagious delta variant began to take hold. And before long, COVID-19 started surging again.
At that point, the CDC had no choice but to acknowledge that the delta variant is, in fact, a game changer. And due to its ability to make vaccinated individuals just as contagious as unvaccinated people with regard to spreading the virus, the CDC was forced to walk back its masking guidelines. In July, it put out an update -- all individuals, regardless of vaccine status, should be masking up once again when indoors in public places in areas where transmission is high.
That creates a pretty big dilemma for employers, many of which had been making plans to bring workers back to the office in the fall. It was one thing to ask people to show up in person after many months of remote work and adjust. But now, it's another thing to ask employees to come back to the office and wear a mask at their desks for eight or nine hours straight.
In fact, the CDC's latest stance on mask-wearing could delay a lot of office reopening plans. And that's something real estate investors would be justified in worrying about.
Office buildings face another setback
To be clear, it's not just masking requirements that may prompt some companies to delay their office return plans. The fact that the delta variant itself poses a huge danger to employees is also fueling those decisions.
But the masking component makes things even trickier. Not only is asking workers to mask up for eight or nine hours a day a pretty hard sell, but it's also something that's difficult to enforce.
Are employees allowed to de-mask to sip coffee at their desks in the morning? Can workers who show proof of vaccination be exempt from that requirement when seated at their desks? And what about workers with breathing issues for whom wearing a mask is more of a burden? Do those employees get an exemption?
It's a series of tough calls to make. And so some companies may opt to not make them and instead, wait for things to improve to the point where the CDC once again green-lights the ditching of masks among the vaccinated.
Given the way the outbreak has progressed, though, that could take months. And while vaccination rates have picked up recently in response to the delta surge, there's still a large portion of the population that won't get vaccinated no matter what.
So far, a number of major employers have pushed back their office reopening plans, and investors shouldn't be shocked if those return dates largely get moved to late 2021 or even early 2022. Office REITs (real estate investment trusts) may therefore continue to be a precarious investment until the coronavirus outbreak stabilizes and companies are able to bring workers back under more normal circumstances.