During and since COVID 19, there has been much activity in the commercial real estate world surrounding office. In Midtown Atlanta alone, Google has leased 500,000 sf, Microsoft has committed to building its second headquarters and this week, Cisco announced 1,000 jobs coming to the old Norfolk Southern office building in Midtown. In the technology capital of the world (Silicon Valley), many of the big names are doubling down on scarce real estate in California. What’s going on?
Over the past several months, I have had many discussions with decision makers in the C- Suite to get their opinions on office space. A summary of their feedback is as follows:
CEO – organizations need office to build culture and the future of the company…that has to be done person to person
CFO – would love to outsource all real estate expense to home to boost EBITDA
CTO – going crazy trying to network and provide cyber security for mobile workers at home
Human Resources – less hanky panky but more difficult to hire remotely.
What happened after 9/11 in New York? People fled high-rise office buildings and went to New Jersey. Consensus was that concentrating your best talent in one place was a risk, and there was a move to decentralize with emergency recovery centers all around the world. I actually worked on a disaster recovery center that was 10,000 square feet of fully wired office space that sat empty but was there for the IT department. In the event of a disaster at the main office, they could drive down the street and be operational with no downtime.
Is office space dead?…No. Do people like working from home? They like the flexibility of it. What is really going to transpire? Nonessential workers will have more flexibility to work at home to perform mediocre tasks that are not client-facing chores. Let me be sensitive to point out that nonessential doesn’t mean unimportant. It doesn’t require strategic and collaborative efforts to affect change. The aspirational employee will want to be in the office as much as they can. Assuredly, the top brass will be promoting the new leaders from the bunch they bond with day in and day out….and that won’t happen on Zoom calls while the up and comer is at home. Up and comers? Get back to the office…
Change is gradual, and everyone is trying to figure out what to do next. Kudos to the strong leaders who are demanding employees get vaccinated and return to work. While I am sensitive to vaccine hesitation along the lines of medical sensitivities, the world needs to get going again, and either you are on board or not. If your boss says get vaccinated and get back to work, you have a choice in this free economy, don’t you?
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