I’ve always laughed at conferences about people who try to predict what the future will look like in 10 years within a given industry. They look to past trends and events as inspiration for what path the future may take. They use this extrapolation to come up with ideas that paint a grand vision of what the world may look like. Even before Covid-19, it was an impossible mission, but at least we were able to say “next year will look much like this year.” Now, even that is false.
We know without question that real estate for the second half of 2020 and into 2021 will not look or feel like it ever has before. What we don’t know is what it will look like. There are companies and people wildly speculating about desks six feet apart and the return of private offices. There are companies that believe we will all start working from home and no one will go back into offices. It’s safe to say, the truth probably lies somewhere between these two spectrums, the only question is where.
There are a number of dichotomies at play which we do not know which way companies and individuals will land:
- Work from home: will this become a more accepted norm or will there be an even stronger individual desire to ensure that they have office space?
- Team collaboration: virtual meetings have been surprisingly successful for team recently, but is this because it’s a mandatory requirement for them to be successful or because it really is a viable alternative?
- Productivity: is the world now working from home looking successful because productivity is naturally depressed while businesses and countries try to recover from the impact of Covid-19 or will there be a drop off as economic activity picks back up?
- Individual psychology: will there be a mass reversion to some glorified past inside the office that never really existed with people coming back at a higher rate than before as people seek refuge? If it happens, will the trend be a momentary blip or last for a time?
These tipping points will determine whether offices must remain the same or change. If there is a need to change, they will set the direction of that change. Unfortunately (or fortunately depending on how long you think effects of Covid-19 will last), real estate is naturally slow to change because it takes so much capital and lease dates do not usually align to allow things to happen on a nice, clean schedule.
One way or the other, it is way too early in the change cycle to make real predictions with any degree of confidence. All we can really do is try to ride out the current situation while maintaining future flexibility.