There is enormous speculation about the impact of work from home (“Work From Home”) on the office market. Although tech progress and Covid practices will have a long term impact on Work From Home and office utilization–it is too soon to draw any significant conclusions. At the moment, office space is considered to be toxic and therefore very harmful to your health. It is also illegal for non-essential workers to utilize. Therefore, the office right now is a very tough sell. Next, the City is shutdown–no restaurants, bars, jazz clubs, sport games, concerts, museums, festivals, theatre. Indeed, the City is like Disneyland but you can’t go on any rides, see any shows, or attend any parades–a very tough sell. These distorted conditions are causing distorted behaviors. We cannot and should not draw long term inferences from behaviors during these conditions.
I will let you into a little secret:: the office market gets crushed in every recession. Office space is the luxury good of the work world. It gives that boost during expansions. It does really well in long expansions. Office space is not a big expense at 3 to 5% of revenues when a firm is in growth mode. It get cut back in recessions.
We will have a lot to learn about how to integrate Work From Home and our offices. How do we integrate the video conference with remote workers with workers physically around the table? Do we use large screens throughout the room or does everyone have a small screen around the table (which may be better for my favorite application –“share the screen mode”). I believe we will use Work From Home to relieve congestion, long commutes, and allow more homeownership. That will in turn make offices and cities more enjoyable. Offices will be made more productive and collaborative and serve as a tool to give a business an edge during the expansions. These trends are not new. I have attached my blog from 1996 where I discussed both Work From Home and the Collaboration Office evolution.