In a recent Bloomberg article titled “Employees Are Quitting Instead of Giving Up Working From Home,” a Morning Consult poll was cited that found 39% of U.S. adult workers would consider quitting if their employers weren’t flexible about remote work. Office space owners are understandably wondering what the impact will be on their businesses, but the effects may extend well beyond commercial offices.
U.S. workers have new behavioral norms and expectations, and their effects are likely to ripple across all types of commercial real-estate. Office spaces will likely feel the impact of remote work first, but have you considered the impact on other forms of commercial real-estate?
Urban restaurants that depend on the lunch crowd, for example, may face challenges as their customer base shrinks. A 39% reduction in customers will not be forgiving to the thin margins in the restaurant business. Who knows, maybe some restaurants will have more success than others. Suburban restaurants may get a boost from more people at home. Or, maybe margins will be pressured by the dramatic adoption of delivery apps for meals.
Grocery stores may also see an increase in sales, as former office workers spend more time at home and need food and supplies. Instead of companies purchasing supplies, workers would need to make these purchases themselves. What’s going to happen to toilet paper sales if 39% of workers don’t use their office facilities anymore?
What about multi-family housing? Will this be the next boom, as renters seek larger spaces with an extra room for a home office? Or will the trend be toward single-family homes for rent, as workers don’t have to worry about commuting?
The fact that fewer Americans are commuting could also impact retail real estate. Will convenience stores see fewer fuel ups as workers commute less, or will they see more local drop-ins for that afternoon pick-me-up? Shopping centers and strip malls near office spaces often rely on nearby workers. With a sudden decrease in customers caused by remote work, will some retail centers lose business and tenants? Conversely, will retailers shift to suburban areas, where their customers now live and work?
It’s hard to say what the impact of so many people working from home will be, but it’s pretty clear that our Covid experience has inexorably changed how we work, shop, and live.
The real point is that working from home will impact all commercial real estate. So, you can either wait and see what happens, or use real-time insights for your whole team to innovate and dominate during this creative destruction.