The benefits of having a remote-first workforce are apparent. Concerning the COVID-19 pandemic, it's better for everyone’s hygiene. With new cloud-based technology and conference call software, is there any need for commercial real estate? The benefits of renting office space holds to be valuable in the current climate.
The first benefit for a remote-first company is the lesser costs for overheads. In fact, there may not be any overhead costs if the executive team is working remotely. As opposed to commercial real estate you don’t have to buy insurance or pay for any utilities. Also, no need to buy office supplies and office decor. When taking an office tour, you'll get to know the amount of energy to run an office and what your costs could be. If the rent is too much, it's time to engage in office lease negotiations with your landlord. Those seeking to keep their commercial office portfolio intact will listen to your wishes.
One of the benefits that people tout the most about remote working is how employees are more likely to work longer hours. They’re in their own homes, and they don’t need to travel to and from work. They can put dinner in the oven and resume their emails, and generally, they feel more connected with technology. Take an office tour of your work space at night and see how many employees are working late. When renting office space, half the time it's not used. Is it worth the money?
A real company culture
There’s nothing that can replace the value of face-to-face communication. Office spaces foster a real company culture with fluid discussions, an exchange of ideas and better camaraderie. This is something that is worth paying for which is why the industry is seeing a plethora of office lease negotiations. Many companies renting office space would rather hold onto their real-world presence than rely totally on remote-only/first. Others are wavering which direction to go, which is why renegotiation rent demands could go higher.
Not as difficult as it used to be
It's not as difficult as it once was to weather the storm if you are finding new offices to expand your workforce. Brookfield and JBG Smith are both pumping cash into their commercial office portfolio. Brookfield is launching a $5 billion rescue fund for its commercial real estate tenants in retail. JBG Smith is offering $2 billion of liquidity to their office tenants. Both have said they will weather the storm of this recession. They have plenty of firepower to hold onto all of their clients. Business owners are not being thrown to the wolves as previous decades they would have. Thanks to renegotiation rent prices, it's possible to have a business that only operates from office spaces. Brookfield and Jbg Smith seem to have the firepower to see this pandemic and lockdown through to the end.
A lowering in square feet price
The average square foot price of office space is between $30-70 in New York. Los Angeles, it’s between $3-6 and in Chicago, it's around the same as the latter. In Washington DC as of May this year, it's $50. All indications show that the average price per square foot is decreasing. It will make office lease negotiations more viable. This gives rise to the notion that tenants could renegotiation rent prices and landlords will need to concede a bit of ground. In fact, Boston Properties has offered $1.25 in unsecured notes to its clients. They're bid is to retain as many tenants as possible in their commercial office portfolio. Thanks to companies like Boston properties finding new offices post-lockdown, shouldn’t be any trouble. Tenants should take full advantage of what Boston Properties is offering.
Watch before you choose
Business owners who are finding new offices can take a virtual office tour instead of taxi-cabbing around the city. This makes it convenient for all involved, especially as travel restrictions are still in place.