Bisnow's podcast, Make Yourself At Home, hears from members of the commercial real estate industry about how they are managing this new reality and gaining insight into their day-to-day approaches. You can subscribe on iTunes, Spotify and Amazon Music.
On this episode, we talk to Nick Romito, the CEO of VTS, a cloud-based leasing and portfolio management system. The company tracks office tours each month, and it releases a monthly VTS Office Demand Index.
Last month, the company reported a surge in demand — nationally, the index jumped 86 points, a monthly growth rate of 28%. However, in New York City the demand is still 20% down from February 2020. Romito said if tours are up, deals are imminent, meaning companies are planning their comeback — just how that comeback looks in practicality is the big question.
“We do feel like a big part of that surge is pent-up demand, the question is, does that growth continue or does it start to temper a little bit?” Romito said. "The thing that we have been waiting for is the tech tenants have really been on the sidelines for quite a while … Tech is now starting to wake up, and that’s a big part of what we’re going to need to see this recovery happen."
Long-term, while overall office demand is still in question, Romito said his conversations with fellow CEOs give him optimism for the future value of the workplace.
"I’ve spoken to something like 25 CEOs who have anywhere from 5K SF of office space to 1M SF and I would say 95% of folks are going to say, 'It is mandatory you’re in the office in September.' Is it three full days or four? No one’s doing less than three, that I can see," he said.
"Clearly Salesforce and these folks are saying, 'Well, [remote work is] going to be permanent.' Good luck. I’m going to give them probably a year before they say, 'This is a terrible decision, our teams have to collaborate and work together.'"
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