Will COVID-19 Permanently Shift the Balance between Work from Home and the Workplace?

Pillsbury - Gravel2Gavel Construction & Real Estate Law
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Pillsbury - Gravel2Gavel Construction & Real Estate Law

On March 15, 2020, the Center for Disease Control and Prevention (CDC) issued formal guidance to combat the spread of the coronavirus by recommending against gatherings of 50 or more people for the next eight weeks (CDC guidance), which includes nearly every office building in America. Thus, began the most significant work from home experiment this country has ever seen.

With the majority of the workforce working from home, many employees see this as an opportunity to finally prove that, “yes, that meeting could have been an email.” However, while workers will not be distracted by constant (and potentially unnecessary) meetings, a number of issues and questions arise with working from home.

Most importantly, is this working from home experiment a temporary opportunity for businesses to test remote work ideas or is this the new normal? And how will this affect commercial real estate moving forward?

A Time for Trial and Error

While the COVID-19 pandemic and the working from home experiment are still relatively new and constantly changing, there are a number of key issues that commercial property owners and landlords should consider now in order to protect the health of their tenants and employees, as well as their business interests and investment. Beyond commercial property owners, employers should take this opportunity to reassess the metrics by which productivity and efficiency are measured. With employees working from home and practicing social distancing, traditional metrics of tracking productivity like face time in the office and in-person communication will be drastically reduced. Employers will need to take advantage of other available resources like video conferencing to ensure that the lines of communication remain open and productivity can remain at as close to normal levels as possible.

This is also an opportunity for employees to truly test their work-life-balance while working from home alongside a number of distractions from household chores to children and pets. As work-life-balance became a significant issue for the millennial workforce, many have been calling for working from home solutions, including the idea of “hoteling,” which involves employees staggering between working from home and a small number of shared offices. This idea has allowed employees to reduce their time in the office along with lessening the burden of daily work logistics and commuting, while also allowing employers to reduce their overall square footage, which in turn reduces rental expenses.

This working from home experiment will allow businesses and employees to put a number of possible working from home ideas into practice to test which of those yield productive results and which require further development (but hopefully not another all-hands meeting).

The New Normal

If this working from home experiment is, in fact, the new normal, commercial property owners will need to consider how their commercial space is currently structured and how commercial buildings will need to be adjusted to account for this new normal. If working from home becomes commonplace, the overall office demand could be drastically reduced, so commercial property owners should continue to provide value and key services to tenants to distinguish themselves from competitors. The reduced in-office workforce would also lower the need for large parking facilities. As companies and employees become more familiar with working from home and working in remote areas, the need for the traditional office model may be replaced by a demand for more open common areas and shared co-working space as tenants become less dependent on their traditional office services.

As the coronavirus pandemic and the world’s response changes minute by minute so, too, will the commercial real estate landscape. Whether this is merely a WFH experiment or the new normal, it is safe to say that COVID-19 will leave a lasting impact on the economy and the commercial real estate markets.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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