Predictions the pandemic will have a long-lasting impact on office space has yet come to pass, according to national valuation and commercial real estate firm BBG.
Since the arrival of COVID-19, there has been intense speculation companies would need significantly less office space due to a sharp increase in remote work. But one recent industry report found office-space demand is undergoing a strong recovery from this market sector’s plunge a year ago.
The VTS (Visual Thinking Strategies) Office Demand Index (VODI) showed demand for office space in major U.S cities is up nearly 118 percent nationally since January, and demand is around five times higher than the pandemic low set in May 2020.
“More office workers receiving COVID-19 vaccinations and a rebounding U.S. economy were cited among the factors driving companies requiring workers to return to their offices,” BBG stated. “While office-space demand nationwide dipped slightly in May, according to VODI’s latest report, which tracks tenant demand in the office sector, the decline was mostly tied to seasonal factors rather than an indication of an ongoing trend.”
There also hasn’t been a noticeable upswing reported in efforts to expand space between office workers’ desks to minimize the spread of airborne pathogens like COVID-19. Keeping traditional office space mostly intact also is attributed to that fact in-person collaboration still plays an important role in companies’ day-to-day operations.
However, the company added, the concept of remote work remains a viable one, as many firms plan on a hybrid approach of employees working from home and the office. But remote work-related tasks have their limitations.
A McKinsey Global Institute report on COVID-19’s impact on work said that activities such as negotiations, employee brainstorming sessions, and new employee on-boarding “may lose some effectiveness when done remotely.”
“It’s highly encouraging to see companies continue to view office space as a necessity to support a collaborative work environment,” BBG CEO Chris Roach said in the release. “We anticipate that the office sector and other commercial building markets hard hit by the pandemic will make a robust comeback sooner than later, as the impact of the pandemic continues to fade.”