Rodolfo Delgado is the co-founder and CEO of Replay entries, the first platform to find rental apartments in NYC, focused on raw videos.
As I type this, I’m waiting for my next Zoom meeting in what has become my pandemic uniform: a button-up shirt tucked neatly into my gym shorts. I know I’m not kidding anyone, and I know I’m not alone. Like many, being able to make my own hours from the comfort of my own home has increased my productivity significantly. I have virtual meetings with my team several times a week, which fits well with our needs as a company that is right in the tech sector.
For others, however, the office provides an environment that is integral to the task at hand, where resources such as ideas bouncing, spitting, and artistic marketing efforts rely heavily on the creative hive. One thing is certain: the Covid-19 pandemic is having an indelible impact on our society, not only from an economic and global health perspective, but also on where and how we do business.
As we emerge from the grip of isolation, companies across many industries are tackling the inevitable: the hybrid work environment. Some companies offer remote situations, while others favor the “three days in the office, two days away” methodology. We are entering uncharted territory – the wild west of the workplace.
How it will pan out remains to be seen, but there are clear arguments for both sides. Let’s take a look at some of the effects the hybrid work environment will have on the real estate industry, from changes in office design to employee perks.
Redefining residential and commercial real estate
The distribution of spaces within a building is quickly adapted to our post-pandemic needs. Google makes what they call “Team Pods,” essentially rooms with chairs, desks, whiteboards, and storage units — all of which can be easily rearranged. They have also developed new meeting rooms, called “Campfire,” which are modular, circular rooms with seating and impossible-to-ignore displays for virtual participants.
Microsoft is also quickly adapting its office space by building state-of-the-art meeting rooms aimed at those who are not physically present. The conference rooms will include eye-level cameras and wall-mounted screens that will allow employees to maintain eye contact with their co-workers even when they’re not there.
All of these changes are positive for the people who use these spaces, because while many people like to work remotely, it’s not for everyone, especially those who live in small spaces. If you want to rent a house with more space, you have already had to deal with extreme fluctuations in rents. New Yorkers who renew their lease in 2020 often got up to four months free on a 16-month lease, a concession rarely offered pre-pandemic. These rare incentives were intended to retain people who wanted to live in scattered cities or spaces. However, now that the coronavirus seems to be more under control, incentives are starting to disappear. Today, some landlords still offer incentives, although my experience tells me that the concessions will slowly disappear and return to their normal pre-pandemic levels as time goes on.
It is important to note that these trends will have a major effect on commercial and residential real estate and how the market behaves. With fewer people in the office, companies can now choose to recalibrate the amount of square footage they lease for their employees. As a result, the reduced demand for office space will lower the market value of the building, which is dependent on rental income. For landlords who find themselves in such situations and with foreclosures on the horizon, repurposing the building for housing may be the most viable option.
Working from home and its effects on the environment
On the plus side, the global temporary situation of remote working has helped raise awareness of the amount of control we as humans have to help heal our world. Eliminating the commuter workforce has translated into reduced greenhouse gas emissions and better air quality in many parts of the world. Given these effects, some environmentally conscious employees are unable to come to the office for environmental reasons. Even if the positive effects on the environment seem minor to most business leaders right now, the heightened awareness could open up opportunities for future innovators – a completely new, eco-friendly model for the way people work could be on the horizon.
Working remotely isn’t for everyone, and the hybrid work environment can alleviate some of the stress of always working remotely. Whether you work from home, in the office or a combination of the two, office spaces will continue to exist and welcome people who value exchanging ideas, brainstorming and collaborating with their colleagues. The most positive thing I can highlight is that employees now have more options to manage how, when and where they choose to be most productive.
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