Perhaps still one of the sectors with the most distorted view of its possible ‘return’ from the pandemic, is the office sector. For so long, office landlords cruised through rent-collection, and with minor sprucing up of the facility, wiped their hands free from duties that multifamily landlords live by.
Office buildings today are not nearly back to the capacities before the pandemic. According to data, in fact, office building occupancy across ten major cities, typically heavy office-use cities, are averaging 30%—while Los Angeles floats just below average at 27%. This statistic is an indicator of the uncertainty that many office-use businesses are facing today, whether or not to return to the same office space, or to downsize, move elsewhere and accommodate hybrid-work.
Newmark Executive John Ollen believes that office landlords will have to do more for their tenants if they don’t want anymore hiccups with rent collection. And this could mean getting involved, not just with the person who handles the lease, but with the company employees as well.
“In prior years, the landlords just kind of — and I don’t mean this in a derogatory way — pretty much, in comparison to today, sleepwalked through being a landlord. You just collected the rent, you made sure the windows were clean, that there was parking.”
Because employers are struggling to retain workers, who either find remote work elsewhere or falter to “reopening anxiety,” the consequences of accommodating the employee eventually brings property owners into the picture.
Some of these ‘flexibilities’ may be catering to weekend work schedules, which means amenities at places like a WeWork will have to remain open. Watt Cos. CEO Nadine Watt suggested it would be like taking a hospitality approach and allowing employers to conduct non-business hour events to boost camaraderie.