How Will COVID-19 Affect the Office Market?
US social media giant Pinterest withdrew from its new San Francisco office project in August, despite the decision costing them 90 million dollars. This strategic move is a reflection of how working life has dispersed into homes and other remote locations this year. Flexible office solutions, for example, companies providing coworking spaces, are in demand.
On the other hand, Facebook leased nearly 70,000 square meters of office space in Manhattan in August with the intention of turning New York’s former main post office into a huge open-plan office. It is clear that there will still be demand for office space as long as the location is right.
Companies in Finland are also having to think about what kind of spaces employees will need in the future. As working from home becomes the norm, offices will increasingly become meeting places. Health and safety concerns have increased the desire for offices to be spacious, but the long-term trend of the decrease in the overall amount of office space seems set to continue. What we might see alongside this trend is an increase in multi-locality. Rather than a downtown head office, employees might be better served by decentralised work hubs.
Changes on the office space market will also impact the residential market. Old office buildings are already being converted into apartments and other uses nearly as quickly as new office space is being built. At the same time, more and more people want a functional working space at home and new kinds of amenities in the buildings they live in.
Lease agreements will also need to be more flexible in order to support the convertibility and versatility of spaces. Proactive property owners should also take the lead in health and safety expectations. Property owners that have performed ventilation inspections and comply with voluntary ventilation and coronavirus recommendations published by HPAC organisations will be able to increase the competitiveness of their properties. It seems clear that the pandemic has accelerated changes that had already begun in the real estate business.