What COVID-19 Means For The Future of Commercial Real Estate

By Jonathan Wasserstrum
Founder / CEO, SquareFoot

Right now, with the economic impact we’re seeing from the health scare we’re enduring, nobody knows what is yet to come. As a business owner, I need to pay attention to what’s happening, keep my team safe, and do right by my clients by offering them support and guidance when and how they ask.

With so many people working from home in a meaningful way for the first time, we anticipate for at least some of these companies on the other side of this global scare will look for a more flexible office space situation and routine. People have grown accustomed to having both parents home for dinner and to assist with homework assignments. What was once a luxury to dream of is now a reality on the ground. And some families with two working parents will look to hang onto that hope.

Since my company is a commercial real estate company that helps growing businesses find office space, one might believe that this anticipated change might disrupt our mission. In truth, while nobody could have predicted this pandemic and its economic effects, this accelerated move toward flexibility for employees in terms of when and where they work is something we believed was already in development.

For years, we have encouraged landlords to be more flexible, too, when negotiating with tenants about the spaces they were offering them and how they would be used, and by whom.

Toward that end, we acquired PivotDesk in early 2019, which is essentially like Airbnb for office spaces to pair up a host and a guest to share an office, and then, a few months later, launched FLEX, which better enables than before businesses to get the office spaces they want with the lease terms they need. 

This work-from-home experiment won’t work well for more companies than it pleases, and we’d expect that people will begin (soon) to crave the old parameters of their lives, including their commutes and seeing their colleagues in the flesh. But they will also covet and value the flexibility they came to enjoy when at home.

So the future of commercial real estate lives within the notion of flexibility — setups that allow people to work in different places on different days. What that may mean is that options like hoteling or hot-desking for desks at the office might quickly take off as a solution. Just because you have 50 people on staff in your city doesn’t necessarily mean you need 50 desks or space for all 50 to be on-hand at once. Tenants will work more closely with landlords to figure out the right solution for their team’s actual desires.

Through that lens, office space will not only remain a line item for most growing businesses, it’ll gain increased attention than before. The conversation will grow to be less about matching up a solution for the size of their company and more about how to give them the greatest value for what they seek.

Jonathan Wasserstrum is the CEO and co-founder of SquareFoot, a commercial real estate brokerage based out of New York with an office in Dallas.