The case against a fully remote workforce

Despite the overall successful shift to working from home, offices are not a thing of the past, according to a new report from real estate investment management firm Black Creek Group. 

While there are potential cost-savings to having employees permanently work from home — notably, spending less money on office space — they want to be back in the office for at least a few days a week as the COVID-19 pandemic wears on, the report found. It added that over time a fully remote workforce suffers declines in collaboration and productivity. 

“Investors owning multi-tenant office buildings that provide flexible configurations in desirable, lower cost-of-living cities or suburban markets could benefit,” Black Creek said in the report.

Fully 70% of employees said they wanted to work from the office for three to five days per week, albeit with social distancing precautions, according to a May survey from Gensler cited in the report. Only 12% of respondents said they wanted to continue working from home full-time.

Demand for more accessible suburban offices

But where the office space is located could shift from high-cost cities such as New York, San Francisco and Chicago to cities with lower taxes and living costs, such as Denver, Charlotte, Atlanta and metro regions in Texas and Florida.

Over the last decade, companies have shifted to more open work environments that require less space per employee (decreasing from 242 square feet to 214 square feet for each), the report said, but the pandemic means companies will need more space per employee for social distancing. Black Creek forecast a net wash for office square footage.

Sparked by the pandemic, many office tenants will likely shift at least some employees from big-city office towers with high rents, packed elevators, and many workers relying on public transit to a hub-and-spoke model, the real estate investment firm forecasted. That will increase tenant demand for suburban office buildings that offer more space at a lower cost and are closer to employees’ homes. 

Overcoming post-COVID challenges

The report offered insights into the challenges for many works of working remotely over time. 

A majority of respondents said they wanted to be in the office for face-to-face meetings, socializing with colleagues and impromptu conversations. Working in isolation, over time, tends to produce diminished productivity and engagement, according to EQ Office CEO Lisa Picard, cited in the report. 

Collaborating with other employees and staying in the loop about others’ projects is more difficult, particularly for jobs that place a premium on company culture, require creative interactions and provide mentoring and training, according to the Gensler survey cited.

Respondent s— including Millenials and Gen Zers — also said they found it difficult to avoid distractions, advance their careers and maintain work-life balance working remotely.