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Ken Gooden

Managing Director
JLL
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THE CORPORATE OFFICE POST COVID-19

by Ken Gooden

04
24
20

As we wrap up week six of the COVID-19 crisis, it feels more like week 30. With most of the American office workforce working from home, I find myself looking forward, not backward any longer. No more talk about time management at home, how to maintain a professional image
in sweatpants, or how to run a Zoom meeting.

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I find myself thinking about the lingering effects and the future of this pandemic, on the office environment and workforce. The impacts will change the way millions of us work in offices around the country, both in the short and long term. Here I share my thoughts on the immediate effects that have taken place in just five short weeks, the potential long-term threats, and perhaps most importantly, the issues I don’t foresee having lasting impact. This crisis has probably been the hardest thing most of us have been through (unless of course you survived the Great Depression of the 1930s). I don't want to talk about the horrible health crisis we continue to endure, or the hopefully once in a lifetime economic crisis we currently find ourselves in. Both are much more important, in the grand scheme of things.


However, I want to recognize that most of us will go back to work in our offices, cubes, conference rooms, and lunchrooms very soon, and many of the ways we work are going to change, some significantly. Corporate users need to evaluate their situations and prepare for impending changes. Think about how unlikely a training room filled with 60 people in 200 square feet feels right now. Or a 2000-person conference in Las Vegas. Both feel like a lifetime ago.

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Unprecedented times bring uncertain answers. While I don’t know exactly how or when we will be invited back to our office spaces, I do know things will be different. My findings are based on my own 25 years of experience in the corporate real estate industry, as well as numerous conversations I’ve recently had with companies of all sizes, landlords, developers, and other real estate professionals.

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Some of these observations and comments I’m relatively certain of. Others are questions and discussion as to how corporate America reacts in the first few months after having a 100% remote work force for at least the last 6 weeks.

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  1. Health will be everyone’s biggest concern. How can we ensure the health and safety of every employee (and limited visitors) that come through our door will be the issue keeping most HR managers up at night for many weeks to come. I know of a company that is contracting a 3rd party health care provider to take every employee’s temperature as they enter their facility. This might become the norm, for the foreseeable future. I assume this violates some privacy laws, BUT are we all expected to give up some rights and liberties to get the economy moving again? What happens to the employee who has a slight fever and an important meeting in 15 minutes? The frequency of cleaning offices and shared spaces will a hot topic of conversation and highly scrutinized. How do high-rise buildings ensure that elevators are safe when occupied by multiple people? Will masks be the new “tech casual”? Will hand sanitizer be on every other table, desk, and countertop? Probably.

  2. We will go back to work in phases. I was on a call with a large company in Hong Kong today who is about 2-3 weeks ahead of our re-entry. They shared their insights and processes, which began with dividing employees into two arbitrary teams; A and B. Group A was able to come to the office on even dates of the month. Group B on the odd. Employee workstations are now at least 2 meters apart and conference rooms have a maximum number of occupants. Large breakrooms will be entirely vacant, except for quick eating of lunch or vending machine use. Zoom and WebEx meetings will continue to be the norm.

  3. Companies will have to be more concerned about employee spacing and very cognizant of not forcing employees into an environment where they are working at 6-7 employees per 1000 square feet. For context, many technology companies occupied at 8-9 employees per 1000 square feet, pre-Covid. Some of this is accomplished in the extreme near term by the phasing approach. The big question; is this a sustainable long-term solution? For some, yes, it probably is. But others will eventually want the entire team back together, which will lead to more difficult decisions on occupancy and spacing.

  4. Incredibly interesting is the topic of immediacy. Are companies eager to get their teams back into the office and everybody into the same physical space ASAP? Creating a world class culture is challenging with a disparate workforce, and idea generation can be as spontaneous as an impromptu discussion in the hallway, right? OR is corporate America thinking that post-pandemic, our company has operated efficiently with all my employees working from home, so, maybe we can operate with a smaller group in the HQ and keep some at home? Saves money on real estate costs, lowers my occupancy (see spacing issues above) and some employees are happier (and likely more efficient), working from home. Challenging decisions.  -> 

These are all issues that every company that has office-based employees is going to have to deal with on some level, over the next few months. I’ll leave it to history to tell us how the majority will handle these challenges in 12-18 months. Again, these are unprecedented times.
 

The longer-term challenges and opportunities are always tougher to understand. Some of the above “new-isms” in the corporate real estate world will linger for a long time post reoccupancy. Whereas some will be phased out rather quickly. Some people are predicting this will be the beginning of the end of the high rise, because of the high concentration of individuals in one space. Some think employers will decide to eliminate the central office altogether. I don’t agree with either.


I do see more employees working from home on a permanent basis and non-critical business travel and large conferences being curtailed or completely eliminated for a longer period of time. Las Vegas, Orlando (Disneyworld, wow…that could take a while to recover!) and other major cities that rely heavily on corporate conferences to occupy hotels, convention centers and restaurants will be in for a tough few years ahead. I also wonder about the liability this will bring to companies that aren’t careful about cleanliness and ensuring infected employees are not at work or are isolated from others.


I can almost hear the legal argument now; “You put four employees into a small conference room, Mr. Employer and one got the others sick, so you are liable for…….”. There are a lot of potential risks there. This might be the most lasting and most impactful issue facing corporate America going forward. Companies will have to be more mindful now than ever before about the potential risks of the wellbeing of their employees with even the slightest bit of a perceived or confirmed illness. How this gets enforced is a major challenge. It will absolutely take a lot of honest accountability from employees.


I have lived and worked through three other major recessions. The post 9/11 period may not have been considered a recession in most of the country, but it did affect the real estate market for a period of time. The tech collapse of the early 2000s and the financial meltdown of 2009-10 were real recessions in which people lost jobs, homes, and money. They were rightfully terrified of the future. All of these downturns eventually ended, and the real estate market bounced back stronger than ever. When in the inferno, sometimes there doesn’t seem to be an end or solution in sight. However, I’ve learned that companies, people and economies are resilient, and this will come to an end. We will be stronger as a society because of it. If I was a betting man, I’d bet that within 12-18 months of us getting back to our offices, cubes and break rooms, this horrible crisis is a distant memory, and we will have found our new normal is similar to the old normal, and our optimism will be restored once again.


At least I can hope so….
 

Plus, it makes the repetitive days in my overly brown home office feel shorter. 

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ABOUT ME

help companies align their real estate and office requirements with their business and growth goals. Having been in this business for 25 years, I've advised all kinds of organizations during a variety of market conditions. From financial services, tech and law firms to oil and gas, and healthcare companies, my passion is in finding creative real estate solutions that increase the bottom line and create productive work environments. Commercial real estate is always evolving...and the trend toward more collaborative work spaces is changing the game.

Outside the office, I enjoy spending time with my two kids and wife along with traveling, skiing and golfing. 

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