Will people who are now working from home because of Covid19 continue at home when the pandemic is over?

Anyone discussing office buildings will bring up that question in every conversation.

I’m a tenant representative and have worked with businesses throughout the pandemic helping tenants find office space.

Office Tenants Have Their Own Question:

Will there be great deals down the road when former office workers continue to work from home?

Honestly, I don’t think anyone knows for sure, including me. But I do have good reasons to believe that this is a good time to lease office space if you are considering it. 

A number of indicators are pointing toward repopulating offices and that may have already begun.

But the good news for tenants thinking of booking new space? There is a lot to choose from and rents have remained flat to lower since the beginning of covid. Plus landlords are offering inducements go get leases signed.

Follow the Money

People who invest in real estate have not bailed on the commercial office market and are showing signs of getting more optimistic.

Chart of stock price Boston Properties
Chart of Office Building REIT Boston Properties. It's flirting with a high for the year.

 

Stock price chart of Columbia Property Trust
Columbia Property Trust, another REIT specializing in office buildings is already making new highs for the year.

 

Investors are looking at the progress of covid improvement and are liking what they see.

Chart of daily new Covid19 cases in the US

New cases of Covid19 may have topped out and are currently not growing.

HOWEVER

Chart of daily deaths due to Covid19.Deaths due to Covid19 continue to decline!

And with the rapidly growing number of Americans taking the vaccination, deaths should continue to decline.

With mortal danger from the virus dropping daily, the risks of working in an office are diminished.

Perhaps this is why...

Office rental rates have held steady during a time of decline in occupancy. Even with growing office space for lease, rental rates have not declined.

This was certainly not the case in the last commercial office crisis in 2007-8.

What's the Deal for Tenants?

Rents are not declining. However, They haven't increased either. You can say in general that rates have held steady for over a year. Prior to covid, rates were rising steadily. So new tenants and renewing tenants can expect to pay about what they would have paid last year, all other things being equal.

More Good News for Office Tenants

There is a huge assortment of property on the market. If you are a new tenant, it will be much easier to find what you need in the way of size, location and layout. 

Lease renewers also benefit. If their current landlord cannot offer what you need to renew your lease, you can probably find a lot of options to bargain with and other landlords to help you move to their building.

All tenants can benefit from choice in today's market.

Additionally, many landlords are offering free rent as an inducement to sign a lease. For example, a 60-month lease might be changed to a 63-month lease with the first three months free. For a $10,000 per month lease, the free months would reduce the rent to $9524.

The Case for Reduced Office Use

The only evidence I've seen for a collapse in occupancy is chatter and snap polls. 

The chatter is on the side of many more people working from home and commercial office space going empty.

Polls are just another form of chatter. Participants seem to be guessing.

And polls are reporting every conceivable scenario. I don't see any consistency.

And until the covid restrictions are lifted and people return to the office and work together face to face without being freaked out by getting sick, we will not know for sure if the work-from-home concept will endure.

Tenant Rep Guess

The big money is betting on a renewed commercial office demand. I've found it's better to follow the money rather than for-what-it's-worth opinions.

My guess: maybe ten percent of workers working from home will stay at home. 

If you are in the market for office space or want help in renewing your current office lease, give me a call and I can show you what's out there. You will learn where you stand in today's office leasing market. It won't cost you a penny.

Client Testimonials

My company is new and growing fast. We need more space. I thought it would be easy. Look at LoopNet, check out a few locations and sign up.

I wish.

LoopNet is full of jargon and misdirection. You find listings that are no longer available. ("Oh, we just leased that. But I have another space just like it that I can show you.") Bait and switch BS.

After following leads around in circles, I was super frustrated with the process and getting closer to a space crises at the same time. I clicked Peter's site in Google. I really wish I'd done that in the beginning.

Honestly, I have been in business for my entire adult, but I'd never heard of a tenant rep, someone who specializes in helping commercial tenants like me find and lease space. It is an incredibly valuable service. Just knowing about it is worth a semester in business school.

Peter showed some great properties. He listened, came to understand my company and showed space that was relevant and possible. Each new space inspired me to look more. I got new ideas.

Finally when we decided on a great location in downtown St. Pete. I liked everything about it. But finding the right space was just the beginning.

My company is in the medical field and has many special requirements: unique electrical hookups, plumbing for oxigen tanks, and a one-of-a-kind floor plan.

I admit I was daunted by the lease and all the requirements of my company. But Peter stepped up and negotiated a great deal with my new landlord which included a generous build-out allowance.

There are not enough adjectives to describe how much Peter has done for my company. If you are looking to lease commercial space, do yourself a favor and call Peter. You will be real happy that you did.

Unbelievably, I paid nothing for his service. My new landlord took care of that.

Fred Palmer, CEO
Stemedix

I have known and worked with Peter for many years, and would not hesitate to recommend him for any real estate service.

Peter is very knowledgeable in all aspects of commercial real estate, but is particularly adept at negotiating leases and contracts.

Linwood Gilbert, MAI
President at Urban Realty Solutions

From first meeting Peter, and throughout the office suite search process to the negotiations and execution of my office lease, Peter provided excellent communication and professional service. He took the time to really understand my office space needs and was very resourceful in providing timely, valuable information and sage advice. He helped make the whole process a pleasant and friendly one.

I appreciate everything Peter did for me and I highly recommend him to anyone searching for commercial real estate consultations and services.

Jerry Albrecht
Attorney at Law

If you are looking to lease a commercial or business space Peter Fischbach is your man. We've worked with him for years and could not be more pleased. 

He is friendly, extremely well-versed in all of the services he offers, and has an unparalleled understanding of real estate in general and the idiosyncrasies of the local Tampa Bay market. 

The landlord might not be happy with the rent, amenities, and contract terms he will negotiate for you, but you and your company will.

Jake Braun
Kapok Marketing
Lead Developer
CIO

I have known Peter Fischbach for approximately 20 years both as a friend and professionally.

I have found his knowledge of Real Estate, marketing and business sense extraordinary.

He has a great knowledge of Architecture and recycling of old buildings for new uses.

I would recommend him for any professional Real Estate consultations and related services.

Peter Goldhammer, Architect
Florida #0006567

We have known and done business with Peter for some 15 years and he has acted for our group of companies in several office, commercial and industrial leases.

He is a seasoned professional, great to work with, always on on top of whats going on in the market and acting not only as a broker but ongoing advisor.

He is a great negotiator and I always feel like we got the best deal possible when we close.

Finally he is a nice guy and like ourselves I'm sure has developed hundreds of other great relationships and friendships in the business.

Carl Dilley
President
Island Capital Management, LLC.