The Future of Commercial Real Estate Depends on HR’s Coronavirus Response
There’s a valid argument to be made that HR leaders have a stake in commercial real estate. Considering HR’s central role in the employee experience, workplace design and meeting the needs of staff, HR teams have to regularly think about the physical spaces in which teams work.
These days, HR is doing that more than ever as it considers what the workplace of the future will look and feel like in a post COVID-19 world. As we collectively rethink and redesign the work experience in a way that respects the new reality of being around other people in shared spaces, what is decided in HR offices in conjunction with commercial real estate landlords and brokers will go a long way toward determining how comfortable people feel in returning to work.
Jonathan Wasserstrum, CEO and founder of commercial real estate technology firm SquareFoot, is seeing it first hand as he talks with both landlords and tenants about what comes next.
“Right now, we have more questions than visible solutions in place when it comes to the workplace and how you can arrive smoothly and safely,” Wasserstrum says. “For most companies, that means revising and revisiting their office spaces ahead of re-inhabiting it. They’ll have to assess individually what their best courses of action is going forward to establish and encourage social distancing in the workplace. Since we’ve never been through this kind of reimagining before, it’s bound to take some trial and error, especially at first, before your team feels truly comfortable again. It’s no doubt going to lead to some strain and stress as people re-enter the office spaces they remember more fondly from a different era of our collective existence.”
New Office Space
Despite the rise of remote work and the embrace of new workspaces, co-located work still has value and is still the preference of some employees who face distractions and logistical hurdles at home. Some companies have already exited their office locations or broken leases while others will soon follow.
The question then becomes how much of the workforce remains remote and for those that don’t, where do they find themselves commuting to. Whether or not commercial real estate bounces back from a crisis that is causing property prices to fluctuate is forcing those within the industry to get creative, because the needs and expectations of companies looking for office space are quickly changing.
“What I’m focused on now is figuring out how to help the next set of people, those looking for office spaces that suit their evolving needs,” Wasserstrum says. “I can tell you already that executives who had lists of preferences and requirements in February for the space they hoped to move into later this year have adjusted their guidelines and expectations in accordance with COVID-19 suggested best practices to help fend off the virus. That starts with stocking personal protective equipment (PPE), hand sanitizer, etc.”
This also impacts the way brokers give tours. Where once you might spend a great deal of time on personal interaction, now social distancing has to be respected, PPE worn and elevator usage planned ahead of time.
“Accordingly, we want to convey the right message on office tours. When we get the approval to move ahead with tours in our local markets, we are instituting some changes to how we conduct business,” Wasserstrum says. “The hope is to offer reassurance. Although these are specific to the industry we operate in, they can and should represent the types of changes that all people are making now and going forward. What might strike some as extreme caution will inevitably be, in my opinion, the best way to run businesses like ours that depend on in-person interactions.”
The CRE Picture
Commercial real estate plays a big part in the economy. In 2018, it was estimated that the industry had a market value of around $16 trillion. Getting that going again is no small task, but the changing requirements for landlords and brokers trying to woo firms into leasing office spaces is nothing new.
The 2020 Commercial Real Estate Outlook report from Deloitte highlighted this, with respondents saying that technology expectations of any building are on the rise. As things stood, a significant facilities update or overhaul was going to be needed, but now, spaces have to be designed to accommodate a variety of other factors.
A New Approach to Health
On top of creating spaces that can be socially distanced and having amenities that promote a clean work environment and unprecedented convenience, HR leaders now have to create a new wellness culture.
When we think about the bigger health picture, there is a lot more for employers to worry about than legal issues and regulations as a result of the pandemic. A sick employee coming to work could have huge consequences for the overall spread of COVID-19 if they work in a busy downtown area or office park, ensuring things get worse before they get better.
Battling through illness to get work done is not a part of workplace culture anyone will miss, but these days, it’s essential that employees stay home if their sick.
“A reopening won’t be the same for every area, neighborhood, building, or even company,” Wasserstrum says. “We must all do what’s best, and what’s right, on behalf of the people we represent, internally and externally. If someone is feeling sick, they should stay home. There’s no longer a case to be made to fight through it and to show up anyway. We must all take care of one another, and that starts with sending the right message to everyone involved. Minimizing exposure is the most important factor right now; conducting business as usual is not an option.”