Author Topic: the death of the urban office building  (Read 25074 times)

cherzeca

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the death of the urban office building
« on: May 26, 2020, 10:06:21 AM »
Covid's most lethal effect will be on urban office buildings imo.

anecdote:  a family member lives in NYC and works for a firm with national operations but whose executive offices and most of its operational staff work from a NYC office.  they have found that they are doing quite well with remote working on zoom etc.  HR did a survey and among other questions asked, "would you consider living someplace other than NYC if we went to remote working as a possible permanent option?"  50% of the 150 staff who replied answered YES.


LC

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Re: the death of the urban office building
« Reply #1 on: May 26, 2020, 10:11:57 AM »
Covid's most lethal effect will be on urban office buildings imo.

Not the 350,000 dead people?

I'm being slightly unfair but I think the point is that you have sensationalized the topic of reduced office space.

Personally I don't think there will be a "death of urban offices", but I do think we will see a measurable reduction in office space. How much? I would guess maybe 10-15% over the short term. And further, I think we will see companies rethink current and future processes to reduce their reliance on physical office space.

But the counterpoint is that for most people, work is a part of our identity and we are social creatures. So we will want to work around our colleagues.

From a selfish point as a REO in a  Tier 2 city (Denver), this would somewhat benefit me.
« Last Edit: May 26, 2020, 10:13:40 AM by LC »
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patience_and_focus

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Re: the death of the urban office building
« Reply #2 on: May 26, 2020, 10:41:22 AM »
Covid's most lethal effect will be on urban office buildings imo.

anecdote:  a family member lives in NYC and works for a firm with national operations but whose executive offices and most of its operational staff work from a NYC office.  they have found that they are doing quite well with remote working on zoom etc.  HR did a survey and among other questions asked, "would you consider living someplace other than NYC if we went to remote working as a possible permanent option?"  50% of the 150 staff who replied answered YES.

Agree in the short term. Disagree in the medium to long term (> 5 yrs). The powerful economic forces that have been making large cities grow even larger, especially over the last 30-40 years (shall I hazard to say at least a 100 years) are not going anywhere. This is a bump in that process. Large cities like London survived bouts of plague in the distant past. Modern cities like SF and NYC survived spanish flu, HIV etc. Asian cities like Hong Kong, Shanghai, and Singapore survived SARS (far more deadly than this current SARS-CoV2) and grew nevertheless in the last 20-25 years.

That doesn't mean there won't be damage and bankruptcy in real-estate tied to offices in the next 1-5 years. But I don't see long term trends changing, especially when this virus does not hit the young and urban crowd hard. The old folks living in cities or nearby crowded suburbs may move out at faster pace. Frankly that is desirable because at least in Bay area housing and construction is depressed partly due to NIMBY supporting older folks and outdated zoning laws. Young people are far more receptive of changing zoning and allowing construction of both residential and office buildings.

Broeb22

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Re: the death of the urban office building
« Reply #3 on: May 26, 2020, 10:46:51 AM »
Agreed with LC that the thread itself is sensational.

Would retail space or hotels or AirBnB-dependent properties not be harder hit?

The counterpoint to your belief in the death of office space is how much space will exist between workers in the office of the future?

Will cubicles or open office spaces that saved space be a thing of the past? If that is that case, then won't companies need more office space to hold the same number of workers? Wouldn't that actually cause demand for office space to actually grow?

Like LC, I also agree that people are social and many would like to be in an office.

I also think that the sample size of the last 2-3 months when people are scared for their jobs and have few alternatives for their time is perhaps not a good data point to extrapolate from. Almost every industry is facing some degree of challenges, so if you're one of the lucky ones to have a job, you're probably pretty engaged with work right now. 2 years from now when things get back to "normal", maybe those same hard workers will not be working so hard, and maybe when more options are open outside the home some will decide to attach a fan to their mouse at 4 and head out for an early happy hour.

mcliu

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Re: the death of the urban office building
« Reply #4 on: May 26, 2020, 10:50:10 AM »
They didnít have Zoom back then though.

A lot of knowledge work (marketing, accounting, finance, law, programming) can be done remotely.

patience_and_focus

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Re: the death of the urban office building
« Reply #5 on: May 26, 2020, 11:02:02 AM »
They didnít have Zoom back then though.

A lot of knowledge work (marketing, accounting, finance, law, programming) can be done remotely.

Programming is a very good case study. Webex has been around for 20 years. Skype has been around for 15 years. Yet the image of a lone programmer coding away on a Hawaii beach is (mostly) a myth. Yes there are those, but very small percentage of overall number. If anything despite the new age tools, co-location was driving innovation in the software world. Now there is always an argument that webex and skype were clunky. But they were better than nothing during early-mid 90's, and still the co-lation of software engineers into city centers accelerated after that.

cherzeca

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Re: the death of the urban office building
« Reply #6 on: May 26, 2020, 11:21:32 AM »
appreciate the comments.

I think face to face business meetings will remain important.  but cubicle to cubicle daily work arrangements will be proven unnecessary by covid.

as to sensationalism, keep in mind that as to mortality rates, Minnesota has had more covid mortalities for people over 100 years old than for people less than 50 years old.  the fourth leading cause of death in US is nosocomial (medical/hospital malpractice).  the human species is imperfect, and sending covid infected people from hospitals to nursing homes is an example, should you need one.  so if we cant have an intelligent conversation about the long term effects of covid, then so be it...

rkbabang

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Re: the death of the urban office building
« Reply #7 on: May 26, 2020, 12:45:56 PM »
appreciate the comments.

I think face to face business meetings will remain important.  but cubicle to cubicle daily work arrangements will be proven unnecessary by covid.

as to sensationalism, keep in mind that as to mortality rates, Minnesota has had more covid mortalities for people over 100 years old than for people less than 50 years old.  the fourth leading cause of death in US is nosocomial (medical/hospital malpractice).  the human species is imperfect, and sending covid infected people from hospitals to nursing homes is an example, should you need one.  so if we cant have an intelligent conversation about the long term effects of covid, then so be it...

What this situation has proved beyond a reasonable doubt is that for many industries and types of workforces working from home is doable and productive.  What remains to be seen is whether or not people will want to long term, or whether management will let them.  My CEO just told us all that we probably will not ever return to an always in the office way of doing things and that working from home will be a large part of how we operate going forward even after this is all over.  I think in tech at least office space will be much reduced in the future.  Tech people being probably the least social (as a general rule anyway) and the work most doable from home, the effects should be most visible there.  I've talked to my uncle who is an insurance executive in Boston and he was saying how shocked he is how little having everyone working from home has effected their day to day business.  The work is all getting done and he would never have predicted that.  He doesn't like working from home personally though, but the company being headquartered in downtown Boston makes it problematic to re-open anytime soon since most of their employees take transit to work.  So who knows which industries and/or companies will change permanently, but what has changed is that it is no longer about whether or not it is possible.

KJP

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Re: the death of the urban office building
« Reply #8 on: May 26, 2020, 01:39:50 PM »
They didnít have Zoom back then though.

A lot of knowledge work (marketing, accounting, finance, law, programming) can be done remotely.

Today's brief can easily be written remotely.  But how does a law firm develop tomorrow's partners, i.e., business generators?

Castanza

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Re: the death of the urban office building
« Reply #9 on: May 26, 2020, 01:41:05 PM »
They didnít have Zoom back then though.

A lot of knowledge work (marketing, accounting, finance, law, programming) can be done remotely.

"Can" and "will" are two different things. At the very most I think a lot of companies will revise their work from home policy to be more flexible. Other than that nothing will change 5 years out. When in all of history have cities not been the driving force and focal point of business, commerce, industry, development, entertainment, athletics, and the arts? Never

So maybe some companies will consolidate office space down to accommodate part time wfh operations. What does that mean? Probably that you'll see more companies moving to big cities soaking up the new office space (if there truly is consolidation). 

For every 1 New Yorker looking to find a permanent wfh gig in the suburbs, you will have 100 driven individuals from Timbuktu looking to kick it in a high rise office.

Lastly the customer/client aspect and the effect offices have on them is not being mentioned. If I'm looking for a lawyer and paying them a lot of money, you can be damn sure I want to meet them face to face in a nice professional office instead of their "quaint" little home office that probably smells of baby diapers, dogs, or whatever they had for dinner the previous night. Skype has it's limitations as well. 
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