Over the past year, working from home has transitioned from “temporary” to a new norm that many companies have begun to not only accept, but openly embrace.
With many employees receiving the go-ahead to work from home for the foreseeable future (or at least work from home most of the time), what will happen to the big, roomy office spaces their employers no longer need?
In a recent Forbes article, “The Impact of a Hybrid Work Environment on Real Estate,” co-founder and CEO of Replay Listings Rodolfo Delgado predicts a “downsizing” trend within the commercial real estate space, potentially opening up opportunities for commercial real estate agents to help newly-hybrid companies navigate the relocation process.
Hybrid Company Trends So Far
Companies like Microsoft and Google are leading the way with flexible spaces designed to accommodate fewer in-person employees while still including virtual employees in roundtable meetings.
Google’s “Campfire” rooms are circular to make it easy for everyone to be addressed, while Microsoft’s eye-level cameras and screens on the walls allow employees to maintain eye contact with their teammates, even if they’re remote.
And if you’re wondering if the need for office space will ever phase out completely, it’s not likely.
Delgado also considers the fact that in some metropolitan areas, employees may always want the option to work in an office outside their home if it’s safe.
Plus, some companies and roles need in-person dynamics for better performance.
However, overall, hybrid companies are looking for less square footage and easily rearrangeable rooms to accommodate a fewer and inconsistent number of in-person employees.
How Will the Hybrid Model Affect Commercial Market Value?
Since now-hybrid companies may rarely need to host the entire team in person, Delgado estimates that hybrid companies will “recalibrate” the amount of square footage they lease.
As a result, leasing revenue will decrease, which also reduces their buildings’ market value. In some cases, landlords may need to repurpose some space to use as residential housing. In the worst-case scenarios, some commercial landlords may be forced to foreclose.
What This Means for Commercial Real Estate Agents
The commercial real estate industry needs trusted advisors now more than ever.
If you’re a commercial real estate agent, reach out to your sphere of influence to see how your clientele are handling the back-to-work transition and whether they need help filling vacancies or planning for repurposing.
Also, reach out to companies directly to see if they’re thinking about downsizing or relocating, then help them navigate the process.
Unprecedented trends will continue to emerge—and staying current helps position you as an invaluable asset to key decisionmakers.
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