Wall Street Journal: “Hundreds of billions of dollars of office building value and mortgages depends on the timing and scale” and its impact on office leases and rents.
NEW YORK – Office buildings grew quieter this year as companies moved to a mostly remote workforce, with many of the nation’s offices completely empty. But as the COVID-19 vaccine campaign ramps up, office building landlords hope for a turnaround in 2021.
However, workers’ return to the office could take time. Some estimates by public health officials and real estate execs suggest that vaccines will become widely available to a greater number of people by late spring or early summer of 2021, allowing more people to move about freely.
“Hundreds of billions of dollars of office building value and mortgages depends on the timing and scale of the return, and how that affects office leasing and rents,” The Wall Street Journal reports. CBRE Group Inc. estimates office rents could still drop by up to 8% this year as the nation remains in remote-workforce mode or some form of it.
Public health experts estimate that at least 65% of the population in the U.S. must be immune for the contagion rate to drop below 10 new cases per 100,000 per day. That will be one milestone for workers to return to offices in increasing numbers, they suggest. Health officials hope that about 45% of the U.S. population will have been vaccinated by late spring.
Upturn for commercial likely in 2021, experts say
Regardless, the return to the office is expected to be gradual. Employees will typically continue to wear masks and take safety precautions as they return to the workplace. However, working from home will continue in some hybrid forms even as the pandemic wears down, experts predict.
“Businesses that are highly competitive for top talent will likely begin opening small satellite offices in metropolitan areas and offering employees the option of working there, at home, or in centralized headquarters – or a combination of the three,” The Wall Street Journal predicts.
Some companies are beginning to make return-to-office plans with an optimistic eye on the end of the pandemic. Office building owners report an uptick in tenants planning deals in numerous buildings rather than just one location as they plan for workers to return to the office.
Some companies are also in discussions with co-working firms like WeWork and Industrious to help spread out the return of employees over multiple locations.
Source: “COVID-19 Vaccine Outlook Prompts Businesses to Dust Off Return-to-Office Plans,” The Wall Street Journal (Dec. 29, 2020) [Log-in required.]
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