Prediction #4. Commercial Office Space Glut, the end of the open workspace, and the beginning of rent-a-conference room booms.
If the workforce is working from home at least 2 out of 5 days, we are going to see a huge decrease in commercial real estate – including something like a 10-20% vacancy rate. Not all of that will go vacant as companies will need to reshape their office-space to get rid of or modify open workspaces.
Expect an increase in private offices and cubicles and a lot of mini-cubes – open workspaces modified with more space and plexiglass between stations.
Each office will likely have 30% more sqft per person but with fewer people in the office each day we likely won’t notice.
Other offices will go completely remote resulting in an extra glut.
The results will trickle across the entire office area. Many restaurants in commercial districts will close since they no longer can be profitable with limited traffic (on top of the reduction in seating due to social distancing and hesitancy to do business lunches). Some gyms in the area may close for similar reasons. This may bring about a vicious cycle where working in commercial districts becomes less desirable resulting in more work from home and even more reductions in adjacent businesses.
On the flip side, even remote companies will want to find ways to bring their teams together. Expect companies to maybe replace their permanent offices with rentals (like We-work) with a focus on conference spaces. People will come into the office 2-3 times a week to have in-person meetings and work from home the rest of the time. Companies that rent temporary private conference room space may see a huge boom.
Opportunities:
- Platforms that provide temporary conference room/meeting spaces like Breather are going to explode.
- I anticipate some office spaces will convert to temporary conference room /meeting spaces. Companies that can help facilitate this change will emerge.
- We will see new innovative pickup-only restaurants that will take advantage of excess retail/commercial space.
- Safe (outdoor) Company Retreat locations will emerge allowing people to drive down and work together as a company in a safe environment. Retreat planning companies and tools will also see a boom.
- A new type of window-shopping. Currently storefronts have been optimized to get people to come inside. Expect some new companies to emerge where the storefront is optimized to get people to make a purchase with codes on the item. Some stores will optimize what items/photos are shown on their storefronts allowing people to make quick impulse decisions and buy items waiting outside the store.
If you currently are working on one of these opportunities or want to work on them, please contact me at charlie at iamcharliegraham dot com