The COVID-19 pandemic led to masses working from home and the commercial real estate industry experienced that change. As it becomes safer to be together again, some businesses are opting to have employees return to the office.
Grant Fitzgerald, regional manager at Marcus & Millichap in Cleveland and Columbus, Andrew Coleman, first vice president of CBRE in Cleveland, and Jeffrey Kahn, president of Commercial Property Partners in Beachwood, weighed in on the benefits of returning to working in person and what to look for when shopping for commercial real estate.
“Workers of all levels benefit from small and unplanned interactions, whether they know it or not,” Fitzgerald stated.
He said there are often valuable questions and comments that occur in passing. People working from home wouldn’t bother to hop on a telephone or video call to have these impromptu discussions, he added.
“We are social creatures and gain a lot more than people realize by being together,” he noted.
Fitzgerald explained that, currently, demand for commercial space is lower because people are “waiting and seeing” how the pandemic situation will play out.
“I think in the mid term and long term, any changes will be moderate,” he said.
When shopping for a commercial property, Fitzgerald recommended that potential buyers ask agents questions such as “what do I need to have prepared up front to put myself in the best position to win and execute on a deal?”
Coleman stated that being around people and socializing are the primary benefits of employees returning to work in their offices.
“I think we’ve all spent a lot of time at home, isolated, and I really believe that returning to the office is kind of a return to ourselves,” Coleman said.
Being around other people and collaborating is helpful for teams to work together, he said, adding that he thinks office spaces are going to look different in the future, as there is a higher demand for collaboration space.
“I like to think of it as being more about the ‘we space’ going forward and less the ‘me space,’” he said. “Past office environments used to be very focused on the individual workspace, work stations, offices, and now I think you’re more intently going to the office for specific tasks.”
These tasks may include brainstorming and team projects, Coleman added.
“I think you’re going to start seeing, as people go back, the benefits of collaboration and socialization also are going to change the way in which spaces are designed and programmed to be more around those collaboration efforts,” he stated.
Kahn said there is a synergy between employees when they are in the office and there are a handful of types of employees for whom it is very important to be back in the workplace. He gave the example of custodians.
“There is also an outside custodian workman who triages the day’s problem and he runs around taking care of them, or (who) we call ‘professional companies,’” he explained. “They are all employees. (It is) very important for them to be back in the workplace and we are seeing now that that is happening.”
He said commercial real estate salesmen have found that they can work wherever and whenever they want, not needing an office space, and rather using phones, computers and cars.
“What’s happened now is the employees have all returned to work (and) every company has its own policy for masking or taking your temperature when you come in, whatever their policy is,” he said. “The salesmen in large part have learned that they don’t really need the office.”
Kahn noted that companies have been looking to buy spaces as of the last couple of years due to low interest rates, but are now starting to lean more toward leasing options as rates have begun to rise again.
“Interest rates are now coming up and we’re seeing people who want to lease come into the marketplace, so it’s now a very strong leasing market,” he said, adding that if a broker is “lucky enough to get a building for sale, it would still go in a hurry.”
Kahn said that something people might not know about commercial real estate is that it is a business, not an investment.
He pointed out that many real estate companies match experienced realtors with newer ones to take on projects.
Having a real estate team of a veteran and a beginner gives clients the wisdom of an accomplished individual, while also providing them with greater accessibility through the addition of a novice broker.
“The advantage for a customer going with a team with a seasoned veteran and somebody younger is you have two ways to make contact, not just one,” Kahn said.