Prior to 2020, working remotely was often considered a privilege and a unique perk. These days, it's practically the norm. Ever since the coronavirus pandemic took hold, many companies have shifted their workforce to a remote setup and plan to continue until the outbreak improves. But some companies may extend the option to work from home well beyond the pandemic.
In fact, Microsoft (NASDAQ: MSFT) recently announced it will allow its 150,000 employees to work from home on a permanent basis -- but not necessarily full time. Many Microsoft employees will be permitted to work remotely for less than half their workweek. Some, however, may be granted permission to do so on a full-time basis. And some employees whose presence may be required in an office at all times won't get to take advantage of this shift.
Either way, Microsoft's news may be jarring to real estate investors at first -- namely, those who invest in office buildings or office REITs (real estate investment trusts). But actually, there's no need to panic over this announcement just yet.
Office buildings aren't dead
Many companies have learned it's possible to maintain productivity in a remote work environment, so even once the pandemic is over, they may opt to allow employees to continue working from home on a full-time or partial basis. But that doesn't mean there won't be any demand for office buildings.
Quite the contrary: At this point, many employees are itching to get back to an office, and employers will likely support that effort to the greatest extent possible once safe to do so.
Right now, there are so many precautions and logistical considerations to be met to support in-office staff, and some companies feel the effort just isn't worth it when working remotely is an option. But once the pandemic wraps up, we're likely to see a growing number of companies bring back their staff in full force.
That said, some companies may continue to offer employees the flexibility to work remotely on a part-time basis, like Microsoft. As such, companies' office space needs could change in the coming years, and investors and commercial landlords must gear up for that. Some companies, for example, may not require the same amount of office space they once did; others might seek more flexible terms in their lease agreements.
But even if offices change in the coming years, there's no reason to think they'll become obsolete. Just because employees have proven they're able to maintain productivity in a remote setting doesn't mean it's an ideal arrangement. And while some large companies, like Google (NASDAQ: GOOGL), have announced longer-term plans to keep workers remote, those typically have an end date (in Google's case, July 2021).
The Millionacres bottom line
Therefore, office building investors don't need to sweat Microsoft's announcement. In fact, once the pandemic concludes, there may be a surge in office space demand. It may take office buildings some time to recover, but ultimately, there's no reason to think they're completely doomed.