Predictions Fizzle on Pandemic's Impact on Office Space
DALLAS, July 12, 2021 /PRNewswire/ -- Predictions that the pandemic will have a long-lasting impact on office space has yet come to pass, according to BBG, a leading national valuation and assessment commercial real estate services firm.
Since the arrival of the COVID-19 pandemic, there has been intense speculation that companies would need significantly less office space due to a sharp increase in remote work, as well as a major overhaul of office seating arrangements to accommodate physical distancing protocols.
But one recent industry report found that office-space demand is undergoing a strong recovery from this market sector's plunge a year ago.
The VTS Office Demand Index (VODI) showed that demand for office space in major U.S cities is up nearly 118 percent nationally since January of this year, and demand is currently around five times higher than the pandemic low set in May 2020.
More office workers receiving COVID-19 vaccinations and a rebounding U.S. economy were cited among the factors driving companies requiring workers to return to their offices.
While office-space demand nationwide dipped slightly in May, according to VODI's latest report, which tracks tenant demand in the office sector, the decline was mostly tied to seasonal factors rather than an indication of an ongoing trend.
There also hasn't been a noticeable upswing reported in efforts to expand space between office workers' desks to minimize the spread of airborne pathogens like COVID-19.
Keeping traditional office space mostly intact also is attributed to the fact that in-person collaboration still plays an important role in companies' day-to-day operations. However, the concept of remote work still remains a viable one, as many firms plan on a hybrid approach of employees working from home and the office.
But remote work-related tasks have their limitations. A McKinsey Global Institute report on COVID-19's impact on work said that activities such as negotiations, employee brainstorming sessions, and new employee on-boarding "may lose some effectiveness when done remotely."
BBG CEO Chris Roach commented: "It's highly encouraging to see companies continue to view office space as a necessity to support a collaborative work environment. We anticipate that the office sector and other commercial building markets hard hit by the pandemic will make a robust comeback sooner than later, as the impact of the pandemic continues to fade."
About BBG
BBG offers comprehensive due diligence services including valuation, advisory, assessment, desktop evaluation, energy services, cost segregation, zoning, and ALTA surveys. Headquartered in Dallas, the firm has 40 offices in key US markets and more than 2,700 clients. As one of the Big Five national commercial real estate valuation firms, BBG has achieved a reputation for personal attention, on-time delivery and deep expertise in multi-family, office, retail and industrial sectors. For more information about BBG, please visit www.bbgres.com.
Media Contact
Marc Weinstein
Ascent Communications
(908) 967-9958
[email protected]
SOURCE BBG
Share this article