COVID-19 Catastrophe Won't End Soon, And Will Remake How We Use Office Space
When Joe Brady took over late last year as CEO of the Americas at flexible workspace company The Instant Group, new technology was already accelerating change in the office world. In March, that transformation accelerated further when the COVID-19 crisis suddenly upended the nation, forcing millions to work from home.
No one knows how this disruption will end, but catastrophes can remake how we work and live, and the Chicago-based Brady is certain conditions won’t simply revert to the pre-coronavirus status quo.
“Post 9/11, the built environment around airports forever changed, and clearly we’re smack dab in the middle of another crisis where no one has complete answers,” he said.
But necessity led almost overnight to entirely new ways of running businesses, and companies should start learning from the upheaval, he said.
“The most complete remote working experiment ever is in full tilt.”
Many questioned whether the nation’s residences had enough internet bandwidth to handle the unprecedented traffic. But so far, complaints have been few, Brady said.
“It’s all held up quite nicely, and we now know many more people can work from home.”
Brady said most will likely return to their workplaces, as the need for personal contact has not gone away. If anything, the isolation many now suffer will lead to an appreciation for office settings.
“Our country will experience a tremendous amount of gratitude for simple human interaction,” he said.
But experts say a vaccine for the coronavirus could take more than one year to develop and deploy. That means the need for some measure of social distancing will continue, especially if further outbreaks occur in the months ahead.
“Communal meeting spaces that help people work collaboratively are essential, but it feels like this virus isn’t simply going to just go away, making it OK for people to immediately start showing up and working in open settings,” Brady said.
But once the worst of the pandemic is past, companies can adopt blended schedules, which allow workers to take advantage of online tools such as virtual meetings and spend a day or two each week at home. On other days, they can commute to offices with less density, ones that take into account lingering concerns about COVID-19.
Office designers have already been moving away from open floor plans, and giving clients’ employees a greater variety of workspaces. Huddle rooms, conference rooms, private nooks and other amenities were meant to offer privacy, but can also help workers maintain physical distance from one another, a flexibility Brady said is now crucial.
“It needs to be a key part of any commercial real estate strategy.”
The Instant Group helps thousands of clients each year secure such space in more than 2,200 cities across the globe. It works with a lot of tech firms and biopharmaceutical companies, as well as many in finance and banking and including Fortune 100 companies like Amazon, Brady said. It analyzes existing leases, calculates the total cost of occupancy and provides alternatives. That could involve negotiating new deals on behalf of clients, designing and building their spaces, or quickly establishing outposts in new markets like Istanbul, Haifa or Buenos Aires.
Above all, what Brady wants to provide is agility, so his clients can quickly expand and contract as necessary, he said. The uncertainty that now hovers over the whole economy makes that quality more needed than ever.
“Part of the reason I was so attracted to this opportunity was the need to future-proof real estate portfolios,” he said. “Who knows what is going to be in the headlines two years from now, so why sign a 10-year lease?”
Prior to joining The Instant Group, Brady was divisional vice president for real estate at Walgreens Co., handling a 150M SF portfolio. He led the drugstore giant’s negotiations for a 200K SF lease at Chicago’s Old Post Office, which allowed developer 601W Cos. to kick off the 2.5M SF structure’s renovation in 2018.
Roughly 1,300 Walgreens employees, along with hundreds of others that already worked downtown, moved in January from the suburban Deerfield headquarters into the refurbished building, which has many of the qualities Brady now seeks for his current clients. The company occupies the entire fourth floor, and the open seating arrangement is complemented by a wide variety of conference rooms and private spaces.
“It was a beautiful blank canvas, and literally everything in the interior is new,” he said. “There’s a lot of agility that’s now built into that space.”
Brady is currently helping organize a new think tank that will bring together corporate heads of real estate, building owners, property managers and others to produce white papers, monitor the office sector’s health, and brainstorm ideas on how to protect users’ health and safety, and how to help the market recover.
He expects that recovery in the U.S. will take time, partly because many portions of the country were slow to adopt the social distancing recommended by public health experts.
“It’s a lot easier with authoritarian regimes like China, where when the government tells people to do something, they do it,” he said.
“Some people think we’re going to have a V-shaped recovery, but I think it’s more likely we’re going to see a Nike Swoosh-shaped recovery, where we go down fast, and slowly rise back up to the new normal.”