Socio-economic trends that have been brewing for decades are now reshaping our notion about the modern office. The origin of the working from home trend stems from 1973 when the OPEC gridlock and oil crisis brought the USA to a standstill. This was when the entire country realized that bringing hundreds of people to a large corporate HQ wasn’t going to be sustainable in the long run. The World Trade Center was officially opened later that year on the East Coast – a juggernaut of an office space that totaled 1.24 million square meters of floor space in what was then the world’s tallest building.
Meanwhile, a former NASA engineer named Jack Niles was developing ideas that would render buildings like the WTC obsolete on the West Coast. He came up with the concept of ‘telecommuting’ in the shadows of the 1973 energy crisis that would involve smaller workplaces near people’s homes. Today, our digital infrastructure is robust enough to underpin the actual concept of telecommuting, yet affordable and common enough to make Jack Niles’ dream a reality for millions.
Telecommuting was invented in the aftermath of the OPEC energy crisis. but it’s growth and the popularity of remote working has been driven by a highly precious commodity: time. Research by Regus indicates that the most popular reason for working from home was the desire for a greater work-life balance, chosen by 61% of respondents. Perhaps this is why the average ‘working from home’ employee isn’t your stereotypical young freelancer working from a coffee shop. On the contrary, the US Census Bureau surprisingly found that a typical telecommuter is a 49-year-old man or woman who earns up to $50,000 annually and works for companies that employ 100 or more people.
For several decades, an imposing, large-scale office building was one of the biggest markers of prestige for a business – a sign of a truly successful company. This idea, however, is changing – thanks to the evolution of telecommuting and the ongoing pandemic. An increasing number of people have now been working from home for the better part of the year, and it’s going to be a challenge to return to the traditional model of commuting to the corporate HQ. This is happening all over the world – with 15% of employees working from home in the UK, while in India the number has already hit 50%. As a result, expect more of us in the immediate future to continue working from home as standalone office buildings form a small part of the bigger picture.
Case in point: New York City – specifically Manhattan, the largest business district in the country.
Its office towers have been a symbol of the city’s global dominance for the longest time. With hundreds of thousands of people working out of them, commercial tenants have contributed to the vast economic ecosystem of the city – from public transit to restaurants.
Barclays, JP Morgan Chase and Morgan Stanley were three of New York City’s largest commercial tenants and had thousands of people working in towers across Manhattan before the Coronavirus crisis. As the city now plans when and how to reopen, top execs at all three firms think it’s highly unlikely that all their workers will ever return to those buildings. Other major tech behemoths like Facebook and Google have extended their work-from-home policies through the end of the year, raising more eyebrows in response to the prospect of how some people may never return to the office. With hundreds of people employed in Chelsea, Manhattan, Twitter recently notified all its employees that if their position allows for it, they could work remotely forever.
That’s right – ‘forever’ was the word that was used.
A word that could change the landscape of real-estate and commercial brokering as we know it. There have been several catastrophes and setbacks that the city of New York withstood and emerged stronger – from the 1918 Spanish flu to the terrorist attacks on 9/11/2001 to the Great Recession in 2008. However, this time it feels substantially different, with the economy caught in a sustained nosedive and unemployment levels reaching those of the times of the Great Depression. Several companies may look to shrink their real estate footprint as a way to cut expenses. More importantly, if social distancing remains key to public health, how will large-scale companies guarantee the safety of every employee and ask them to come back?
Our cities and offices are being transformed with many of us embracing the new norm of working from home and flexible ways of working growing in popularity. But, so are commercial brokering strategies, with business as usual no longer being an option in this environment. For those who seize the moment, there will be tons of opportunities to lead and create a whole new use case for a business. Consequently, the future potentially looks pretty bleak for brokers not willing to adapt to change as their bottom line (viz. big, sole-occupancy office buildings) becomes more and more outdated. This presents both a challenge and an opportunity that they can’t afford to ignore. They will have to re-evaluate their sales strategy and reshape their offering to capitalize on the increasing demand for flexibility in how people do their jobs.
As things stand, we aren’t sure if people like going to work to be productive or prefer to be in an office for the opportunities of social interaction. Still, when the dust settles, America could face a real-estate reckoning. Until it has, you know that your team needs to be at their productive best so all of you can sail through these tough times together. Equipping them with home-office furniture seems like a no-brainer if you think along those lines, but investing in more furniture also doesn’t make a lot of sense in these times. BureauOne‘s perfect solution lets you liquidate your existing furniture and lease home-office furniture over custom, flexible lease terms.