Why Covid Has Put the Future Of the Office On Hold

"Meet the new boss, same as the old boss." (The Who, "Won't Get Fooled Again").

Tenant organizations and commercial real estate companies are unwilling to invest in office innovations because the future of demand for work space is still so uncertain.

Rani Molla reports in Re/code:

So far, the office of the future looks a lot like the office you left seven months ago though you probably haven’t seen it. In big cities nationwide, office building occupancy rates are hovering around 25%. Employers have mostly forgone major construction in exchange for less expensive, and more temporary fixes. Many post-coronavirus measures amount to hygiene theater, an effort to make people feel safe rather than making them so. “Not a lot of organizations are willing to deploy capital because of the uncertainty of what the future of office space is.”

So far, the office of the future looks a lot like the office you left seven months ago — though you probably haven’t seen it. Most of those who have been able to work at home during the pandemic haven’t gone back to the office and don’t want to go back until there’s a vaccine.

It’s not clear when, if ever, offices will return to their previous level of activity. As of mid-October, less than 15 percent of office workers have returned in New York City, the largest office market in the United States, according to Partnership for New York City. In big cities nationwide, office building occupancy rates are hovering around 25 percent on average as many of the country’s workers remain stuck in limbo. It’s not yet safe to return to full capacity, and it’s not clear if offices operating at partial capacity are a better solution than people working from home.

Real estate leasing has also slowed to a crawl as the office class has taken more permanently to working in their living rooms and bedrooms. Tech juggernauts like Facebook and Microsoft are offering employees the opportunity to work remotely forever. Meanwhile, even less digitally savvy companies are weighing the future of their real estate and the location of their workers.

The entire landscape of office work has shifted, but the physical workspaces themselves have yet to change much. The open floor plan still predominates the office landscape, and germ-killing robots are still mostly the stuff of science reporters’ dreams. Instead, to goad workers back into offices, employers have enacted a raft of minor precautions to make their offices safer — or to give the appearance of safety — but most have put off major, expensive alterations to their office space until there’s more certainty about a coronavirus vaccine, and, in turn, more certainty about the future of the office.

Those who have returned to their offices have only been able to do so because so many others haven’t. Most businesses are adopting a hybrid work model, which lets people work at home and in the office. And since the majority of people are choosing to work from home most of the time, that frees up space in the offices for those who want or need to come in to have adequate social distancing.

In a way, this hybrid model represents the situation overall. Offices and office workers are in a holding pattern, not ready to commit to working from home or the office. And the future of the office, if it’s going to be substantially different, has yet to be realized for many reasons that have nothing to do with the office itself. A whole spate of other issues — transportation, child care, trust in society and coworkers — is informing employees’ decisions not to go back just yet.

Of those who responded to our recent survey about returning to work in an office, about half said they feel safe there and think their employers have done a good job. But for the most part, employers aren’t forcing employees back, perhaps as a nod to the difficulty of those issues or as an acknowledgment that they can’t guarantee their safety.

Still, many employers want workers back in the office, and many employees want to be back. Both employers and employees, however, say the availability of a vaccine is a main consideration before returning to the office. A widely available vaccine may not be a reality until the middle of next year.

In the meantime, employers are doing what they can — without expending excess cash in a recession — to make the space feel safer for their workers.

If you’re one of the few returning to the office soon, here’s what you might expect.

Office space largely looks the same

Back in the early days of the coronavirus, when legions of office workers were sent to work from home for the first time, many were making ambitious predictions about the future of work. (I declared the end of the office as we know it.) They thought the future of the office would bring touchless entry, completely remodeled office spaces, state-of-the-art filtration systems, and, of course, those germ-killing robots.

The reality has been more mundane. So far, the changes to offices have largely been superficial and temporary.

“To reconfigure a space takes money,” Julie Whelan, head of occupier research for the Americas at CBRE, told Recode. “Not a lot of organizations are willing to deploy capital right now because of the uncertainty of what the future of office space is.”

Juliana Beauvais, research manager in IDC’s enterprise applications practice, put it another way.

“It’s still hard for companies to make the ROI argument for a lot of these more sophisticated technologies, especially if they involve hardware or equipment investments,” Beauvais said. “Do companies really need to spend money right now, when people don’t feel safe or comfortable coming back to the office anyway?”

In their existing spaces, many employers have mostly forgone major construction in exchange for simpler, less expensive, and more temporary fixes that capitalize on the fact that fewer people are coming in.

“These are table stakes to manage a building in the Covid environment,” according to Kevin Smith, executive managing director of asset services at Cushman & Wakefield.

Instead of building more walled-in private offices, for instance, desks have been taped off or chairs removed in order to ensure at least 6 feet of space between employees. Common areas are off-limits and bulk bins of office snacks have gone by the wayside.

Most offices don’t have sophisticated hospital-grade HVAC systems that can handle filtering viruses out of the air, though Smith says some of the wealthier landlords are looking into it. Rather than complete overhauls of air conditioning systems, building managers are opting to upgrade their filters and change them more regularly. Many have also placed smaller air filtration devices around the office.

Plexiglass dividers have popped up to create physical divisions between workspaces and colleagues, though it’s not clear how effective these shields actually are. Indeed, many post-coronavirus measures amount to little more than hygiene theater, an effort to make people feel safe rather than actually making them so.

Nonetheless, plexiglass dividers and other types of lightweight barriers are seeing a spike in demand, according to office furniture company Steelcase, which has also seen a growth in demand for mobile office equipment like tables and carts with wheels. Such requests represent employees’ wanting to be able to construct the space around them and respond to the changing situation.

“All the things we thought in March and April changed in May and June and seem to be shifting again right now,” Steelcase’s VP of workplace innovation Gale Moutrey told Recode, referring to the ways in which our understanding of the virus and how it spreads have changed drastically since this spring.

Getting into and moving around offices is more complicated

Many of the changes to offices have manifested less in the physical space than they have in how we behave in that space. Signage is everywhere, cautioning people to stay 6 feet apart, instructing them in which direction to walk, and reminding them to wear masks.

Mask-wearing, which is often required by law these days, is ubiquitous in many offices, but the degree to which individuals comply with the law varies from job to job. Other less visible changes to office space include cleaning, health checks, and scheduling protocols.

Offices are being cleaned much more frequently than they used to be. (This includes notifying people that the space has been cleaned.) Hand sanitizer — once an impossible-to-find item — is being placed everywhere.

While welcome, many of these changes probably won’t do much to stop the spread of the coronavirus, which scientists believe travels primarily through airborne particles, not so much on surfaces. Rather, they convey the idea that employers are thinking of their employees’ safety.

Health screenings are also common. Thanks to local government mandates, many offices have implemented employee questionnaires — Do you have symptoms? Were you exposed to someone with the coronavirus? Have you traveled recently? — and temperature checks to avoid letting obviously sick employees in the building. This, too, can be a bit of theater. The CDC has said such screenings have “limited effectiveness,” since people transmitting the diseases don’t necessarily have a fever or symptoms.

That hasn’t stopped a whole cottage industry from popping up around these sorts of checks, with security services company Kastle, airport biometric ID company Clear, and health care concierge Eden Health all pivoting to include coronavirus screenings in their offerings. Kastle only allows an employee ID card access to a building once their questionnaire has been completed. Clear uses kiosks equipped with biometric technology, allowing employees to complete their questionnaire and temperature screening on the same device that checks their identity. Eden Health offers not only health screenings on their app but also coronavirus testing on site or at home. Rent the Runway, for example, instituted coronavirus tests monthly for its employees, while a financial services client is getting weekly at-home tests.

Many employers use scheduling tools — or more simply public calendars — to limit how many people can be in the office at once and to book space within the office. Employees can see who else will be in the office and decide when or whether they’re going in based on that information. To a lesser extent, different groups or teams alternate coming into the office by the day of the week.

Real estate is also in a holding pattern

Like offices themselves, the office market at large is also a bit stuck. Companies have stopped expanding their real estate footprints, deferring non-essential leasing until there’s more certainty about the trajectory of the coronavirus pandemic. As a result, more office space is coming on the market than is being leased, and many are choosing to sublease space they already have, according to data from CBRE.

In some markets, this has led to rising vacancy rates and declining rents. However, it’s not yet clear whether these changes are stem from work-from-home policies or are simply reflective of being in a recession, which always results in a real estate contraction, according to Whelan from CBRE.

Those companies that are shopping for new space are also asking questions about safety parameters, HVAC systems, and cleaning protocols, according to Michael Colacino, president of office leasing platform SquareFoot.

“We haven’t had anybody reject a building because they didn’t like the answers,” Colacino said, “but there’s no question people are putting it in a metric of things to consider that they didn’t a year ago.”

Companies are also looking for more space per person than before, despite the added cost, he said. In the past, businesses had typically asked for around 250 square feet per person; now they want more like 300-400 square feet, according to Colacino, who attributes the increase to a need for more collaboration space and a desire to add social distancing.

“When you actually sit down and do the logistics of half-baked plans of rotating through offices, the easiest solution is to take a little more space,” Colacino said.

Nina Broadhurst, a principal and leader of the work studio at Cuningham Group Architecture, thinks when everything shakes out, offices will take up less space. Thanks to working from home and desk-sharing in the office, she’s operating on the assumption that offices will require about 70 percent of their existing footprints.

While the wide variety of solutions to improving the office space in a pandemic may seem slipshod, CBRE’s Whelan thinks of them as all part of a larger effort to build up “multiple lines of defense.” She added, “No one solution we know is going to be perfect.”

As for any big changes — either in the vein of what we thought about this spring or something entirely new — they aren’t off the table yet.

“Real estate is historically an industry that takes a long time to change,” Whelan said. “We can talk about all the great things that are coming, but it’s going to take time to really unfold and show itself in the physical portfolio.”

And those changes might not have much to do with the coronavirus at all; they could represent jumps forward in trends that were already underway.

“When people thought it was going to be tamer — when we thought we could go back in June and September with precautions — we saw more 6-foot gaps and one-way traffic and plexiglass,” Cuningham Group’s Broadhurst said. “The more they haven’t made that leap, the more they’re starting to look forward rather than make adjustments for a temporary situation.”

Broadhurst and others see the future of the office as a place of collaboration, where people come in to work together and to maintain an office culture. They see a future in which fewer people go into the office all of the time, while the vast majority still want office space they can go to some of the time. When they do, they want to be able to work with others. The coronavirus made working from home more widely acceptable, but it also made being together more important than ever.

In the office of the future, the decades-long push toward fitting as many people into the office as possible may finally reverse. But also expect more flexible seating as well as larger and more robust and more numerous conference and other group spaces.

Whelan estimates that offices of the future will have more common space than personal space. Traditional offices are approximately 80 percent cubicles and offices and 20 percent common space; she expects that ratio could flip.

It’s notable that some of these trends feel antithetical to coronavirus precautions. Instead, they could represent what offices will look like after a coronavirus vaccine. The pandemic could effectively be, as Broadhurst put it, “an opportunity to maybe reset how we go about working when we start again.”

“Some of these trends were already underway. Coronavirus has just accelerated them and made people start to really consider them,” Broadhurst said. “People always say, ‘don’t waste a good crisis.’”