As remote work adaptation continues for many Delawareans, companies nationwide are taking a fresh look at their real estate portfolios. Executives are reconsidering who needs to work in the office, how much space they need, where to locate offices, and how to use them.
According to PwC's January 2021 US Remote Work Survey, 87% of executives expect to change their real estate strategy in the next 12 months. While some executives are consolidating downtown office space because of the anticipated growth of remote work (61%), others are expanding their office space to reduce workplace density to maintain social distancing (58%). Some executives are employing both strategies simultaneously.
Global real estate firm Cushman & Wakefield estimates that, as a result of the pandemic and associated job losses, US firms will have vacated 145 million square feet of office space by the end of 2021, with vacancies forecasted to peak in 2022. While they predict real estate demand will return post-pandemic, they estimate that the future of the workspace ecosystem isn't within dense office suites but rather “a mix of traditional office spaces, home offices, and semi-public spaces."
The changing real estate market could pose a wide array of challenges for cities across the country. Many US cities have attempted to attract employers through premier office space in downtown areas, and this approach has been crucial to recent economic development efforts in Wilmington, Delaware. However, cities could experience significant increases in vacant office space since professional occupations are most adaptable to remote work, and surveys indicate executives intend to consolidate space.
For a regional perspective on remote work and office space trends, tune in to the latest episode of the Future of Remote Work series featuring a conversation with Ryan Conner (MPA '04), a Principal with Tactix Real Estate Advisors. Tactix is one of the Delaware Valley's fastest-growing commercial real estate brokerage firms. Ryan's practice is solely focused on representing tenants and other end-users of commercial real estate with leasing, acquisition, and disposition strategies. Topics covered in this October 29, 2020 interview include how companies and organizations are reconsidering their space needs in light of remote work, forecasted changes in the commercial real estate sector, and prospects for Delaware's economic recovery from the pandemic.
The Future of Remote Work series seeks to shed light on what we know so far about the prevalence and impacts of remote work while spurring the conversation, reflection, and action necessary to make this emerging reality work well for Delaware. The University of Delaware's Institute for Public Administration (IPA) presents the Future of Remote Work through their First State Insights podcast.
To kick off the podcast series, Trinity Logistics President Sarah Ruffcorn joined IPA Associate Director Troy Mix for an episode of First State Insights on Managing Remote Work. An upcoming episode will feature Dr. Adam Ozimek, Chief Economist at Upwork, discussing forecasts of the ongoing prevalence of remote work and broader economic impacts that may result.
Follow this series on SoundCloud or search for “First State Insights" to listen on your podcast platform of choice.
To learn more about IPA's focus on the Future of Remote Work or suggest topics or interview guests for the series, contact Troy Mix.
Article by Collin Willard
