We have been following a growing narrative in the commercial real estate press that the Covid-19 crisis will foster permanent changes in how companies organize and run their workforces.

Office Space Will Look Very Different Post-COVID-19 With Social Distancing

These rapidly changing needs are already having an impact on commercial real estate:

• Some employers have started discussions with landlords about downsizing their leases.
• Other may look for flexible office space rather than fixed square-footage long-term leases as they test how to operate under expanded work-from-home options.
• Co-working spaces will fall out of favor as companies forgo hot desks and communal spaces for more sanitary — and less dense — private areas.

Landlords have indicated that some are getting ahead of this looming problem by meeting now with all their tenants to assess their future needs. If you anticipate that companies will be downsizing by moving more workers into home-based offices, there are an upside and a downside to consider:

• The number of tenants seeking new, smaller spaces may present an opportunity to attract them with progressive space options.
• Current tenants may find their office space needs shrinking, which landlords will need to respond to, especially if they wish to keep good tenants.
• Paradoxically, even as more jobs “go remote,” the need for more space within an office will grow. As noted above, tenants will have to allow for more hygienic social interactions and work stations less crammed together. This will reduce the demand for economical but densely packed co-working spaces.
• In fact, tenants may find their current space will accommodate fewer employees with the new emphasis on social distancing and hygiene. And, sending workers home may be the best option just to keep their space needs constant.

“It had been proven prior to this, but a lot of company management and leaders showed great skepticism (about remote work productivity),” Steve King, partner at small-business consulting firm Emergent Research, told Recode. “That skepticism will go away because companies recognize that remote work does work.”

“I do think this is going to reshape the workplace,” Janet Pogue-McLaurin, principal and workplace leader at design and architecture firm Gensler, told Recode. “Social distance thinking may be part of our DNA moving forward.”

Commercial real estate companies are taking the lead in updating thinking about how to configure office space. Cushman & Wakefield is working on a “6 Feet Office” concept that considers all the aspect of office space, from wider corridors to workstations that allow a full six feet of separation.

Put our 30 years of experience with commercial real estate legal matters to work

As legal advisors to landlords our focus will be on how these accelerated trends get woven into the language of the lease agreements. We also advise regarding the conversations between tenant and landlord on how best to update current agreements to reflect this rapid change in office space needs. Contact us with your questions about this “new world” of office space.