The office space had already developed further before the pandemic in 2020. Now something is about to change again that nobody could have predicted less than a year ago.
The office space changed before COVID 19. The cabins had given way to wallless open spaces and communal work areas. Now the inspired “collaborative” office layout that was all the rage seven months ago is unrealistic in today’s world that requires social distancing.
Rent payments, usually one of the largest expenses a business has to spend, are especially painful for business owners when they work in low-space office space. While the rest of an “as is” commercial lease may be the only option right now, prepare for leases and office space to look very different in the future.
The options for commercial office space will change.
Rental period. Prior to COVID, there were financial incentives for signing longer leases. However, in a COVID world where anything is clearly possible and frankly happened, long leases don’t feel like smart business decisions. You feel risky. For example, let’s say 5, 7, and 10 year leases become popular options of the past.
Additional details on force majeure clauses. Most acts of God clauses already list events such as strikes, acts of God, terrorism, fire, flood and earthquake. Unfortunately, in 2020 many business owners learned that “Pandemic” was not included in their list of force majeure clause on commercial leases. Let us assume that in the future entrepreneurs will take a closer look at the clause and insist that terms such as “pandemics” and “closure due to public health orders” are explicitly mentioned.
The ability to downsize. The pandemic has given businesses the opportunity to shrink their size. The feeling that every employee has to work in the same office at the same time is decreasing. Many companies have some employees working from home permanently, alternating the days and times other employees come to the office. The result is much less space required, which can lead to significant rental savings for entrepreneurs.
The rise of “smart” offices. Office buildings must expect that a significant part of the workforce will work remotely on a permanent basis. Hence, the IQ of an office space will be incredibly important when employees start joining. Commercial property owners must invest to make their properties “tech savvy”. This means significant investments, for example in a great Internet. Create ideal meeting rooms where attendees can expertly attend remotely. Taking on technical problems, which in the past were often left to tenants to modernize, is of considerable importance for landlords in order to attract quality companies to their properties.
Clean and safe buildings. With the arrival date of a COVID vaccine still unknown and the knowledge that other viruses could be just as devastating in the future, commercial real estate needs to be both clean and safe. Redesigning existing buildings and creating new floor plans to accommodate social distancing will be important. When you consider what types of surfaces are being installed in public areas that can withstand frequent cleaning and repel viruses, the traditional surfaces outweigh the rest. Ventilation systems, HVAC and other airflow mechanisms will now be in the foreground. It is no longer just a question of whether these systems blow air or not, but above all, how does it blow? Is the system old and out of date? Is it just moving from office to office for the same stale air or is it actively replacing it with fresh? Will a QVC light be used to kill the viruses in the air?
Beauty matters. Office space has to be more “tempting” for employees. Conventional office space is now in direct competition with an employee’s home office. The traditional office space must be comfortable enough that an employee is willing to forego working from home in yoga pants in exchange for an equally satisfactory office environment. Maybe this means that the office space needs to be nicer? Relax? Better concentration? Perhaps there is a shift in considerations when designing office space? A primary focus on the employee’s workspace versus the customer experience? Perhaps the new design focus is on making the work areas as attractive as the public areas?
It remains to be seen what the real consequences of COVID will be for office space in the future. What is certain is that the way we do business has changed radically over the past year. Major disruptions like the coronavirus pandemic require companies to redefine their practices. There is no doubt that the commercial real estate industry will change dramatically in the months and years to come. Landlords who quickly adapt to the new needs of their tenants will flourish. Those who don’t will falter.
Law 4 Small Business, PC (L4SB). A little law now can save a lot later. A slingshot company.
Author: Kristy Donahue
Kristy is the Chief Marketing Officer (CMO) of Slingshot, the parent company of Law 4 Small Business (L4SB). She is an MBA with a bachelor’s degree in psychology. Kristy was previously Senior Vice President at Bank of Albuquerque and now leads the marketing activities of 6 legal brands for the Slingshot group of companies.
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