Remember the office?
It’s that place you used go. Not just once a week or so when there’s a task that absolutely must be tackled from there. But every weekday. Along with all of your coworkers. You know, those people with whom you once squeezed — en masse and unmasked — into stuffy little conference rooms?
For a large chunk of the workforce — with a year of telework now under their belts — the image of that before-time office is starting to look a little bit fuzzy. And that’s leaving many people (from workers, to bosses, to architects, to landlords, to real estate agents) trying to figure out just what the workplace will look like post pandemic.
“There’s going to be a profound, long-term impact on the office market,” says Christine Sable, owner and broker at Sable Commercial Realty in Lancaster. “We just don’t know yet exactly what that will be.”
About 80% of Sable’s business is office related. A pivot may be on her horizon, though she notes that flex space — which includes a work floor component — is still a hot commodity. As for the pure desk job world? It’s going to be interesting to see what shakes out in a Lancaster County office landscape that Sable says had just started to heat up in the couple years prior to COVID-19.
“There was very little new inventory added to the market for 10 or 15 years,” she says.
“Around 2018 the office market was really starting to cook again,” she says. “Vacancy rates were pretty low.”
January 2020 actually looked great, she says. Then came the brakes. And there’s no way the impact of teleworking won’t have an effect on letting those up, Sable says.
“We’ve never before had everyone learn all at once how to use Zoom and GoToMeeting,” she says. “And now people are used to it.”
If more employees are given the permanent option to telework at least part time — and take their bosses up on that — companies may downsize their footprints.
“Yes, some may take more space so they aren’t packed on top of each other,” Sable says. “But a lot of them aren’t going to. They are going to be hesitant to make any investment knowing what happened this time. They may have been looking at more space. But now they’re nervous and saying they can live with what they’ve got.”
Sable says she also doesn’t envision many small or medium building owners throwing tons of money into their spaces to accommodate pandemic concerns. They’re not going to be able to afford it, she says.
“You might have a company that is in the middle of their 10-year-lease — maybe a national-type tenant, like say an insurance company — that might say, ‘We demand that you do something to improve the air quality,’ ” Sable says. “They might do it. A smaller tenant isn’t going to be able to (demand) that.”
Sable herself rents a 1,100-square-foot office and bought a new HEPA (high-efficiency particulate absorbing) system for her space. She says she wouldn’t expect her landlord to absorb that cost.
“Now if I were Google or Amazon it might be different,” she says.
Table of Contents
Office owners with the cash to keep buildings well-maintained have more of an edge than ever, Brandywine Realty Trust CEO Jerry Sweeney said during that office real estate giant’s last earnings call of 2020.
“What used to be points about HVAC etc. on page 15 of an RFP? They’re now Page 1,” Sweeney said.
Philadelphia-based Brandywine’s portfolio includes more than 24 million square feet of space in and around its home city, plus buildings in Washington, D.C., and Austin, Texas. The percentage of people who once worked in that space who end up returning remains to be seen. But Sweeney said many CEOs are anxious to get their staffs back under one roof.
“There are more and more studies coming out — for both small and large companies — (saying) that continued remote work is having a significant adverse impact on productivity,” Sweeney told analysts.
He also said losses that landlords see from any shift toward telework may be somewhat offset by those who are no longer looking at space-sharing designs aimed at shrinking footprints and saving money.
“I think that trend, which had been slowing anyway, is certainly going to go in the opposite direction for the foreseeable future,” Sweeney said.
“We’re going through a number of space-planning exercises with some of our existing tenants and Topic 1 on their mind is how they create more workspace area for each of their employees with greater circulation patterns,” Sweeney told analysts. “Whether that’s a durable trend or goes away … we don’t really know.”
Lancaster-based Armstrong World Industries is banking on a long-term pandemic impact. In the fall, Armstrong unveiled a new 24/7 Defend portfolio.
“Healthy spaces is the dominant topic in commercial construction conversations today,” Armstrong CEO Vic Grizzle said during a 2020 earnings call. “Ninety-two percent of architects and engineers surveyed said they are having conversations with their clients on how to make their spaces healthier and safer.”
The new portfolio includes ceiling panels that self-seal into the ceiling grid and an in-ceiling ultraviolet air purification system produced along with another company. That’s the type of technology that Armstrong used to deploy primarily on projects like emergency rooms.
“This pandemic is serving as a catalyst to renovating commercial spaces to create healthy and safer spaces unlike anything we’ve seen before,” Grizzle told analysts. “And we believe it will continue to evolve for many years to come because healthy spaces are now essential.”
Plenty of hand sanitizer wall units have been ordered for The Exterior Co.’s new headquarters.
The inside of that building will end up looking different than it was expected to look when the roofing company confirmed in January 2020 that it was embarking on a $2.7 million project to convert a historic tobacco warehouse next to Clipper Magazine Stadium.
“Instead of putting all of accounts receivable in this one little section, I’m thinking about spreading them out on different floors,” says Nicole Bair, TEC’s administrative manager. “It’s an opportunity we don’t necessarily have right now.”
The company has been working with half the staff at a time showing up at TEC’s existing Landisville office. Bair and other company leaders say they’re looking forward to having more room to spread out.
More closed-door offices are being considered and furniture lists are being adjusted with the lessons of COVID-19 in mind. Example: The plan for TEC’s new office originally called for five tables in the kitchen break room.
“I took it down to three tables,” Bair says. “In my mind I don’t see everyone hanging out in there now eating lunch.”
At TONO Group’s headquarters, much of the staff used to gather on the regular inside an enclosed conference room, says Hunter Johnson, CEO of that architecture, design, building and development group. These days there are times when that must still be used for whiteboarding or Zoom meetings, Johnson says. But now it’s occupied by at most a handful of employees at any one time. Everyone wears a mask. And the conference room filtration system — newly installed and always running — is kicked up to its highest setting when people are in there.
That’s the type of adjustment many employers are making in their current spaces.
They’re making bigger changes in new ones.
Johnson says his firm was about to start construction on building for a national client in Mechanicsville when the pandemic struck.
“We’d gone into it thinking, ‘How do we stuff as much as possible into this building?’ ” Johnson says. “Then this happened. Now that’s taboo.”
The plan for that client was changed quickly. The layout was switched to a more staggered design. Bathroom features were upgraded to touchless and hardware to antimicrobial. Automatic doors, like the kind you see in big box stores, were added. New furniture was ordered.
Cubicle divider heights for many office projects had dropped to 48 or 42 inches as a norm. They’re now headed back up to 5 feet, Johnson says.
“We were moving into crisp, modern, streamlined and now we’re starting to think about the old-fashioned cubical mentality,” Johnson says.
While that can make aesthetics tricky, it’s more the potential impact on interaction and well-being that has him concerned.
“When you see some of those physical barriers coming back, the restricting of natural daylight and natural views? That’s something we’re going to be struggling with,” Johnson says. “And I wonder about the long-term consequences.”