What working from home, coronavirus mean for office real estate market

2020-04-21 04:00:05 - Confinement

There’s lots of talk that widespread working-from-home, which gained traction due to the coronavirus, might temper office space demand when the crisis is over.

There’s lots of talk that widespread working-from-home, which gained traction due to the coronavirus, might temper office space demand when the crisis is over.

Morgan Stanley Chairman James Gorman gave the view currency last week when he said that the bank would need “much less real estate” in the future. Some 90 percent of Morgan Stanley’s 80,000 employees have been working from home and it’s shown “we can operate with no footprint,” Gorman said. The bank is headquartered at 1585 Broadway.

But there are contrary views. CBRE global brokerage chief Stephen B. Siegel, in fact, foresees an opposite effect.

“Overlooked is that in the future, the trend to compress more people into less floor space will be reversed,” Siegel said. In recent years, open-plan design has reduced companies’ office needs from 250 square feet per employee to under 200 square feet in newly constructed buildings.

“Firms will want more space as they move away from high density,” Siegel said, noting that law firms in recent years have downsized from 750,000 to 500,000 square feet. Increasingly, “They’re finding that doesn’t work. They don’t want people on top of each other,” he said.

How to manage the post-crisis workplace is on many minds. Cushman & Wakefield’s Netherlands office has come up with a “Six-Feet Office” strategy to give employees a safer amount of breathing room.

It’s helped 10,000 companies and organizations in China move more than a million people back to work following the nationwide shutdowns.

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