Real estate rental was never under question when it came to the pre-pandemic world. With the recent surge in the popularity of remote work conditions and social distancing, companies are changing their stance on office sourcing.
Studies indicated that more than 40% of small businesses in 10 separate industries couldn’t afford to cover rent in January 2021 due to COVID-19 norms. Rental payments for office spaces are still a challenge for 33% of small business owners, prompting a change in the way companies to perceive office rental. What trends can we expect to take root in office space real estate sourcing in the post-pandemic world? How will that reflect on the space owners’ bottom lines and can companies operate unhindered even without dedicated office spaces in 2021 and beyond?
Project-Based, On-Demand Office Rental
Some business owners and staff are simply too reliant on office spaces to let go of them entirely. However, paying for rent month-to-month isn’t sustainable under COVID-19 conditions, prompting a change to take place. Renting office space for weeks or a month for a specific project and then going back to remote conditions is the way to go. This minimizes operational costs and allows the staff to bond, collaborate, share ideas, and go back to remote teamwork afterward.
The trend can mark a positive change for office space owners who can rent the same offices to multiple companies in succession. In cases where good office spaces are discovered, companies can decide to extend their rental contract to stay there longer. This can lead to dynamic office sourcing pricing and companies themselves aren’t committed to any one place for too long. Likewise, this can make solving disputes between office space owners and companies more painless, as vacating the premises and moving somewhere else isn’t as difficult.
Opting for Coworking Hubs Rather Than Dedicated Real Estate
Coworking hubs have always been bustling with freelancer and solo entrepreneur traffic. In the post-pandemic world, more and more companies are bound to choose coworking spaces over dedicated offices. This shouldn’t come as a surprise since coworking hubs are more affordable and allow for more networking options for companies.
Hubs often come equipped with conference rooms, cafeterias, and lounge areas where training seminars or team building can take place. In this instance, GetGoodGrade can assist you in writing and formatting documents and presentations for your staff to use. Working in coworking spaces also means that you can use some of their equipment freely, such as printers or projectors. Compared to traditional office spaces, they are far more dynamic and oriented toward modern trends, of which remote work stands out the most. These spaces provide a much better value for companies compared to traditional office sourcing which requires maintenance and investments.
Partial Office Space for Select Staff while Others Work Remotely
Many companies have operated under hybrid HR structures even before the pandemic changed things up. Splitting employees into office-bound and remote has worked well for companies around the world, especially those that outsource to international freelancers and agencies. Broaching the subject of office reopening is difficult not only because of office space rental costs but also for the employees’ morale.
Data by Forbes shows that 74% of companies plan to permanently shift their working conditions to remote management, forgoing traditional offices entirely. This may be a sustainable solution for small businesses with fewer than 10 employees, but mid-sized and large companies cannot do that effectively. Working under office/remote hybrid conditions is the logical solution for these businesses, as it minimizes logistical costs while allowing employees to work comfortably from home.
Increased Efforts to Ensure Healthy Office Space Conditions
Depending on the industry in which a business operates, office sourcing may not have an alternative. Businesses such as law or finance firms for example require dedicated offices to meet with clients. In these instances, companies are bound to insist on more strict and elaborate health and safety measures.
Mandatory hand sanitizers, mask and glove supplies, as well as adherence to social distancing norms, is a must. Each office space can only house so many people at once until safe interpersonal distance cannot be achieved anymore. Daily sanitization of each office space is also a requirement, which adds to the operational costs. However, these standards cannot be sacrificed to soften the blow to a business’s bottom line. In the post-pandemic world, the personal health and safety of both staff and clients should be a top priority.
Sharing Office Spaces with Other Companies
The way companies source offices will also shift toward co-joined office spaces becoming a more standard affair. Two or more companies can share operational expenses and rent to make the prospect of renting a dedicated office space affordable. This is very useful in cases where networked companies decide to occupy the same office space, as employees can collaborate more easily.
However, the aforementioned social distancing and health regulation norms may impede this trend. Office spaces would have to be expansive enough to house employees from multiple companies, making office cubicles the next logical step. It’s also worth noting that in the case of disagreements or fallout, covering rental expenses under the existing agreement may prove troublesome. Co-joined office spaces are double-edged swords, but they can prove affordable for businesses with tight budgets.
Real Estate Outsourcing in a Post-COVID World (Conclusion)
The same changes which are happening to companies are also extending to office space owners and real estate brokers. They need to reevaluate how they approach clients and companies with the understanding that the pandemic has affected everyone equally.
Once a consensus is reached, there is no reason for companies to forgo sourcing office spaces as they did before. While remote work conditions may reduce the scale of office spaces needed for optimal operations going forward, they will never go away entirely. The real estate market for office rental is changing – all we can do is prepare for a post-COVID world where health and personal safety take precedent.
About the Author
Jessica Fender is a copywriter and blogger at Writeload with a background in marketing and sales. She enjoys sharing her experience with like-minded professionals who aim to provide customers with high-quality services.