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Trend Watch: The Future of Office Space

by Erik Hayden, on Sep 24, 2020 1:06:21 PM

Office-people

The question that I’m getting a lot these days is about the future of office space. This drawn-out pandemic work-from-home experiment has everyone wondering if/when/how employees will return to physical workplaces.

Office space is not dead. It will just look different in a post-COVID world.

In fact, some major players are placing big bets on office space. For instance, Amazon recently announced it’s expanding physical offices in New York, Phoenix, San Diego, Denver, Detroit, and Dallas for 3,500 new corporate jobs. Facebook signed a huge office lease in a former main post office in Manhattan near Penn Station. It also bought REI’s unused office headquarters near Seattle.

All this goes to show having physical offices is still top of mind for many corporations. Don’t just take my word for it. Here’s what some of the biggest companies are up to: 

Netflix’ Co-CEO Deems Remote Work ‘a Pure Negative’ - Reed Hastings spoke to the Wall Street Journal about how brainstorming and collaboration are much harder over video conference, and how he wants his workforce back in the office as soon as a COVID-19 vaccine is approved.

Bay Area Office Market May Fare Better Than OthersGlobe St. interviewed Brent Carroll of KBS about the Bay Area’s resilient commercial real estate market and its ability to survive recessions, thanks largely to the high concentration of tech talent and corporations. Carroll predicted companies will want more office space as a result of current health concerns.

Companies Start to Think Remote Work Isn’t So Great – In this Wall Street Journal article, executives discussed the challenges remote working presents: projects take longer, collaboration is harder, and training new workers is a struggle.

Doubling down on office in San Jose – A 15-story office building in downtown San Jose sold in June for $131.83 million – about $575 per square foot. The Silicon Valley Business Journal reported that’s the highest price per square foot paid for a Class A office building in downtown this year! 

Google is moving forward with office development despite COVID-19 – Mountain View approved Google’s 1.3-million-square-foot development on Landings Drive in July.

Future of the office, according to global real estate execs – CBRE Research asked 126 senior-level global real estate executives how the design and use of office space could change after this year. CBRE executive Jefrey Henderson summed up the findings: “The physical office will remain important. That’s the biggest takeaway.” 

PwC U.S. Remote Work survey In this PwC survey of executives and office workers, more than half said they anticipate a future increase in office space because of physical distance requirements and the need for collaboration areas. 

I anticipate that there will be a lot more written about the future of office in the weeks and months ahead. Follow me on LinkedIn as I will be sharing weekly updates with you. 

Contact us today to learn more about our projects in downtown San Jose!

 

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Topics:Opportunity ZonesSan JoseSilicon Valleyoffice

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