How Remote Working Will Affect the Future of Real Estate
Updated: Mar 30, 2021
Written by Aleah Kristin Gardner Exclusive for yomaland.com/blog
Early this month, tech giant Salesforce, announced a permanent "work from anywhere" policy, letting employees remain on a work-from-home arrangement and flexible schedules even after the pandemic ends. As San Francisco's largest private employer and the anchor tenant of the 61-story building's Class A office space, this move will be a game-changer to the city's office spaces and real estate at large. It implies that tech doesn't need to be anywhere, de-emphasizing commutes and the need for office space altogether.
Salesforce isn't the first company to enforce a permanent work-from-home setup, nor will it be the last. There is an increasing number of companies that have announced that they will allow their employees to do remote work indefinitely. There's no doubt that the pandemic catalyzed the rise in remote workers, but the setup's benefits that include better work-life balance and zero commutes spurred the change. This is good for corporations whose majority of overhead expenses go to real estate, but what will happen to investors?
Office space won't completely die
There's no need to be alarmed just yet, as there's little possibility that offices will be abandoned entirely. While many companies move away from their physical headquarters, analysts predict that more office space may be needed in the short term to accommodate social distancing requirements, at least until a coronavirus vaccine is widely distributed. This could result in an increase in leasing and construction activity in less-expensive suburbs. Moreover, there's also a high possibility that businesses will still want most workers to stay in the office at least some of the time to facilitate collaboration and boost company morale.
A change in people's preferences in home and apartment design
Considering how remote work is here to stay, people's preference in terms of single-family home and apartment design is also changing. Their new working setup affords them greater freedom in choosing where and how to live, and many are looking for spaces with great home offices. In fact, home offices have started to rival the attention of the kitchen, since the area where they work is on the buyer's mind. Some may be content with a comfortable space where they can plop down with their laptops, many want a dedicated room with little to no distractions.
Demand for bigger, more flexible homes
Of course, not only employees are encouraged to work from home—executives do, too. Because of this, there could also be an uptick in demand for bigger, more flexible houses. Real estate experts posit that those on top of the corporate ladder will need functional and flexible homes with the ability to convert rooms into workspaces. This can be remedied by builders who will need to redesign homes.
The bottom line
It's becoming more apparent that work and lifestyles are changing due to the pandemic, and both buyers and real estate investors must adapt. Buyers should be smarter about the properties they choose to rent or buy, and investors should also start thinking differently about their rental spaces and optimizing them to accommodate what people need.