COVID-19 puts CRE teleworking to the test

Stay-at-home directives have transformed CRE operations overnight
Here’s how office landlords and tenants are weathering the storm

To help curb the spread of novel coronavirus, 31 states have adopted ‘shelter in place’ orders as of March 31, 2020. Citizens can still leave their homes to pick up groceries, run essential errands, and seek medical care. But for the time being, officials are urging people to stay home and avoid public gatherings—especially if they’re feeling sick or classify as ‘high risk’ due to advanced age or underlying health conditions.

Matters of health and safety aside, the COVID-19 pandemic has radically changed the typical office environment across America. Instead of marching like soldiers to their cubicles each morning, more and more workers have been instructed to ‘clock in’ at home. Now, as the crisis heads into its 4^th week, office landlords and tenants are learning the capabilities—and limits—of their teleworking infrastructure.

The days zoom by

It’s only been a month since coronavirus panic prompted corporations to move their operations online. In hard-hit urban areas like New York City, Seattle and San Francisco, the shift happened quickly and suddenly, while businesses in New Orleans, Detroit and Chicago have had more time to carefully craft and hone their remote work policies. The latter three cities were upgraded to ‘hot spot’ status over the last weekend in March, according to MarketWatch.

“This is like a forced dry run for a lot of companies,” says Kay Sargent of design firm HOK Global. “HOK already has been fielding calls from clients on how they can set up audiovisual and IT systems to handle holding conferences and meetings remotely, more often and with more participants.”

Schools, offices and businesses are now turning to today’s most popular online telecommuting tools such as Zoom, G Suite, Office 365, Dropbox, Slack, ProofHub and Basecamp. The transition has awoken many ‘traditional’ office workers to the benefits of remote collaboration. Since the shift, people are reporting less stress, greater productivity, better time management, and a stronger sense of work satisfaction overall.

Surprisingly, the majority of companies have never tapped into the fast-growing mobile economy. Now, CRE pundits wonder if the coronavirus pandemic will make ‘work from home’ the new normal across all kinds of commercial industries.

Will telework stand the test?

Now that Americans have had time to acclimate to work at home, the question remains—will they embrace the change? For real estate office workers, hoteliers, commercial landlords and other CRE professionals, some say the ‘new normal’ is only temporary.

“I think that there will be a lot of questions regarding hoteling and other open-environment type setups,” said John Shlesinger, Vice Chairman of CBRE. “Do I see people switching because of this? Not really. It’s hard to create a company morale, a sense of identity, culture, with people working from home. Can you train a new worker from home?”

Others point out that corporate real estate was already operating on the ‘lean side,’ with companies renting smaller spaces or opting for teleworking entirely.

“As of last year, the average square feet of office per employee was 194, down 8.3% from a decade earlier,” says Jarred Schenke of Bisnow. “What could be a more radical impact for office landlords will be how and who responds to emergencies to close buildings. Right now, typical office leases leave control of closing office spaces to the tenants themselves. This pandemic could have some landlords revisiting that relationship.”

While tenants in accounting, finance and other areas of big business can generally work from home, other CRE professionals—such as property managers or developers—need to be onsite. For now, experts agree it’s too soon to know if newfangled teleworking tools will survive beyond the era of COVID-19.

“I think most people are keeping the perspective that this too shall pass,” writes Bob Mathews, president of Colliers International Atlanta. “It may take a month or several months before we really know the real impact.”

As always, Everest Equity promises a heightened level of commitment. During times of global uncertainty, we encourage our valued clients to elevate their spirits, welcome change with open arms, and continue serving tenants with respect and flexibility.

Everest says: make your tele-work