Many of my small business clients have once again decided to reopen and, while some of them have challenges, most are very glad to be back in the office again. What about the larger firms?
By contrast, many larger companies, those with more than 10 employees, have not. Google in NYC has postponed the return of their employees until July 2021, Large Law Firms are planning a return 1st Quarter 2021. Why not, you ask, and what will it take for them to come back?
Larger companies, with open space layouts have more difficult issues with safe social distancing. Folks are reluctant, even young healthy, low risk employees, to venture back to bench style seating or even small cubicles where safe social distancing is a challenge.
Companies are considering split shifts, but that still poses problems. Places like the copy machine/supply rooms, the kitchen, and the bathrooms that are difficult to keep safe. Even when we wipe down these areas constantly, safe social distancing can be a real concern.
Work from home, at least in part, is here to stay. In a recent survey, large companies reported 30 to 70 percent of their staff will be, at least in part, working from home permanently.
Still, there is the issue of company productivity and insuring business success in what has become the “new normal”. Take new hires, especially in the professional services sector like law and accounting. Recent graduates from top law schools, for example, are reluctant to work with firms where the partners will not be present in their office. Mentoring and growing within these practices cannot take place without constant and direct contact from top executives. Much of how we learn is by observing and mimicking behavior. This facet will virtually be lost without a group working environment.
How will these changes affect the Commercial Real Estate market, specifically in Westchester, NY and Fairfield County, CT?
Frankly, it is just too soon to tell. We see countervailing pressures. Work from home will reduce the space requirements of existing tenants going forward. On the other hand, no one wants to commute by train or bus to New York City. Will that mean an exodus into the suburban markets? We have yet to see large numbers of subleases from companies that will not be reopening, and we continue to keep a close eye on these developments. Further, it is difficult for tenants to address long term leasing decisions in this environment.
I am personally and professionally grateful for the consistent interactions from my Stamford Business Network team. Having our weekly zoom meeting is a reassurance that business continues to move forward and that creative, competent professionals will find new opportunities to create business growth, even amidst our greatest challenges. I also find perspectives from a wide range of industries, and the open dialog with problem solving solutions helpful. It also does not hurt to have weekly motivational moments, courtesy of Casey Hart.
If there is one bright note within Commercial RE, it is in the industrial market. This space is in high demand with single digit vacancies and should remain strong for the rest of the year and into 2021.
Do you need help trying to make a short or long-term decision? I invite you to discuss effective strategies that can help and keep you informed. Please feel free to reach me by phone or email at www.ambarrealty.com.