The business world and the office will likely never be quite the same as pre-Covid. We know that. But let’s fast forward 6 to 12 months. Better days may lie ahead for several reasons.
1) When the Coronavirus is over and life returns to safety, there will be a desire to come together like there never has been in the history of mankind. That will include returning to actual personal contact in offices for meetings and day-to-day work. There will likely be a pent-up explosion of travel to make up for lost networking opportunities. Business lunches and dinners will be more popular than ever. Even personal sales calls may actually be welcomed.
2) We are already seeing the seeds of the renewal on the streets of New York. Residential neighborhoods are coming back to life. People are out walking and shopping, and flocking to the parks in large numbers. What is missing from this picture is a vibrant central business district with millions of employees patronizing local businesses. Obviously, the office economy has changed and some companies will be looking to reduce their office footprint costs. But others will be itching to return due to perceived lost productivity, whether measurable or psychic.
3) No one knows how the great office workaround will end. Some people hate commuting; they will never want to come back to the office. Others can’t wait to get out of the house. But remember the initial success of WeWork and other coworking companies was built due to entrepreneurs who did not want to be isolated; they wanted the company of other human beings in the office while they did their work.
4) So I choose to look on the bright side. The picture from 30,000 feet is encouraging after we emerge from the dark winter ahead. Yesterday brought the best news yet that Pfizer is closing in on a vaccine that is 90% effective. In turn, the stock market is buoyant.
Spring can’t come soon enough. By then, the United States should have an active federal role in combatting the virus. We could have a vaccine within months. We will likely have a new stimulus package soon of a size to be determined, with money for small businesses, testing, schools, and state and local governments. Some businesses will sadly close, but new ones will be created to replace them, hopefully with generous government support.
At the same time, commercial office landlords will have to be competitive in order to induce tenants to come back. Many of our clients have been holding off in a wait and see mode in making office leasing decisions. What better way to encourage those tenants to jump back into the water than providing lower rents, shorter lease terms, reduced personal guarantees and security deposits, and pandemic protection. The smart office landlords see the carnage in the somewhat obsolete shopping mall sector, and they would be wise to respond to tenant needs before the situation becomes dire.
It is a long way from here to there, but the light at the end of the tunnel is easier to see today. The Chinese philosopher Lao Tzu said the journey of a thousand miles begins with a single step. In the past week, we have taken several major steps on our metaphorically thousand-mile journey to return our world to safety and normalcy.
So that’s the way I see it. More importantly, what do our friends and clients think? Please let us know.