We’ve all been inundated with Coronavirus-related stories and want to provide our perspective on the impact most acutely relevant to TechDigs and our CRE TechLens. We anticipated a market shift in favor of tenants toward the end of 2020, and Coronavirus has just accelerated what was likely already in the wings. We expect that tenants who weather the storm will have their pick of the litter.
The pause in business activity and a general shift to caution reminds us of the Financial Crisis of late 2008. The overall impact on the office market is still to be determined but this week alone will be significant. Our industry is naturally reactive and a trailing indicator of economic trends. As such, those businesses with short term needs will not have much of a choice other than maybe being more conservative. Conversely however, those companies who do not have to make decisions in the next couple years will likely be afforded a softer market in which to negotiate.
One of the most dominant byproducts of this intense exercise foisted on us by Coronavirus as we’ve experienced it so far, and what we are likely to for the next weeks/months and beyond will inevitably result in a lasting recalibration of how people work, study, greet one another, show affection, eat, meet and socialize.
On a grander scale, facilities across every sector nationally, from education and business, to entertainment, elderly and child care are all experiencing a ferocious anxiety-inspired, societally-incited reckoning. Universally, businesses are being forced to create, refine and act on health-related protocols and addressing short term challenges; all of which carrying very long term- if not permanent effects.
Higher education and its ability to transition to online platforms on demand may call into question the need for (as much) brick and mortar provided the efficacy of the curriculum over the period of time online coursework is required.
Regardless if intended; depending on the length of time physical structures remain relatively dormant in favor of employees working remotely, businesses everywhere will have a new beta to benchmark efficacy and efficiency of remote/work from home policies and the true value traditional office space will (or should) play post-Corona.
In closing, Keep Calm and Wash Your Damn Hands!
Chris and Corby