Earlier this year -- when the pandemic was still raging and vaccines weren't widely available -- workers were resigning themselves to doing their jobs remotely for the foreseeable future. But things changed in the spring. Vaccines became more abundant and were shown to offer good protection against COVID-19, so much so that the CDC eventually announced that the fully vaccinated could shed their masks even in indoor settings.
Unsurprisingly, the news was well-received by real estate investors. By removing mask mandates, the CDC effectively opened the door to a widespread return to office buildings. And given the beating office buildings took in 2020, the news couldn't have come at a better time.
In fact, over the past month or so, many companies have announced they'll be putting an end to remote work and calling employees back into the office. Initially, Uber (NYSE: UBER) was one of those. The rideshare giant made it clear that it wanted employees back in office buildings at least three days a week.
But now, the company is changing its tune. And that's something office real estate investment trust (REIT) investors are apt to be very unhappy about.
Upholding remote work
Uber has decided that instead of mandating an across-the-board return to office buildings, it will give its employees the option to apply for fully remote work if they so choose. It will also allow employees to work in different office buildings rather than be locked into their respective pre-pandemic locations.
It's a shift that may not sit well with office REIT investors. While Uber hasn't announced that it's dumping office space, per se, the fear is that if more companies make returning to in-person work optional, they'll eventually seek to downsize and sign smaller leases for the cost savings involved. And that, in turn, could take a lot of revenue away from office buildings and hinder their recoveries.
Of course, remote work doesn't just save companies money on office space. It also widens their talent pools. By hiring from anywhere, companies can gain access to valuable employees with skills that lend new value to their operations. And that's a benefit Uber may reap as well.
The Millionacres bottom line
Like many companies, Uber is still trying to figure out the right work setup for a post-pandemic world (even though the coronavirus crisis is, at this point, not yet over). The company intends to gather feedback from employees so it can determine the right long-term model for its business.
Uber isn't the only company that intends to let workers do their jobs remotely for the long haul. Both Facebook and Twitter have adopted similar policies as part of their respective reopening strategies.
On the flip side of the coin, companies like Morgan Stanley have made it clear that remote work will soon be the exception for employees, not the norm. But if enough companies adopt long-term remote-work setups, it could prove quite problematic for office buildings, especially in light of the very challenging year they just had.