Nationwide COVID-19 Study Reveals Commercial Real Estate Industry at a Crossroads

Beth McCandry

Tenants say offices are vital, but remote working will continue for more than 50% of employees, according to the BOMA International COVID-19 Impact Study for Commercial Real Estate in Q2 2021

WASHINGTON, June 10, 2021 / PRNewswire-PRWeb / – The Building Owners and Managers Association (BOMA) International, Yardi and Brightline Strategies today announced the release of the results of the second in a series of statewide COVID-19 impact studies for commercial real estate. The BOMA International COVID-19 Commercial Real Estate Impact Study captures the latest US tenant sentiment as COVID-19 cases decline and vaccinations accelerate “of office and remote working practices.

More than 3,000 decision-makers for commercial office space were surveyed. While a large majority of tenant decision-makers still view office space as critical to their business operations, tenants are seeing a shift in practices ahead of the pandemic. Participants forecast that, on average, less than half of their employees will be working full-time in the office in the next 12 to 18 months.

“COVID-19 has created a turning point in the entire commercial real estate landscape, and these study results show that the path ahead will bring different challenges and opportunities,” said Henry H. Chamberlain, APR, FASAE, CAE, President and COO of BOMA International. “The value and vitality of offices remain high, and there are also tremendous opportunities for owners and operators to work with their tenants on investments in building infrastructure, equipment, interior design and other features to create healthy, safe and productive workplaces. “

The main findings of the study include:

  • 65% of respondents feel The United States is moving in the right direction with COVID-19 management (up 28% compared to the previous study in Q4 2020).

  • 78% of respondents say their personal office is vital to the running of their business, but say the future use of their space will change.

  • Tenants expect a clear shift towards hybrid work options as respondents reported that the average number of full-time employees in the office would drop from 70% before the pandemic to 43% in the next 12 to 18 months. In particular, they predict that only around a quarter of the workforce (26%) will telework full time / most of the time.

  • The number of respondents of all tenant sizes who say they will reassess their space requirements (56%) has decreased by 5 points since the previous study, while those who were not sure increased from 19% to 37% . Of those surveyed who re-evaluate space, 48% would reduce their square footage, which corresponds to 37% of all office tenants surveyed (compared to 43% in the fourth quarter of 2020).

  • Almost 2/3 of tenants (64%) believe that owners and operators should make additional land investments either in health and safety infrastructure and technology to mitigate future health emergencies, or in wellness facilities, programs and platforms that support the efforts of the Support tenants in improving the corporate culture. Connectivity, Productivity and Wellbeing.

  • 86% are in favor of their property management company’s response to COVID-19 so far (up from 77% in the fourth quarter of 2020), which shows that owners and operators of commercial real estate offer tenants high added value by actively responding to the pandemic.

Additional findings examine the impact of COVID-19 and increased vaccination rates on economic / business impact, land use, likelihood of rental renewals and relocations, confidence in the safety of office space, and plans for office return.

The story goes on

“Our main objective in this study is to not only capture key opinions on how office space is perceived today, but also to educate industry stakeholders about what lies ahead and how we can all help shape it,” said Robert Teel, Vice President, Global Solutions, Yardi. “From its impact on technology and infrastructure to common spaces and amenities, COVID-19 is an accelerator of the ‘future of the office’. These survey results show what tenants will perceive as more valuable in the future and how important the cooperation between owners, operators and industry service providers is. “

“More tenants using telework is an opportunity to create office space that fosters increased personal and remote productivity while also serving as a hub for improved culture, communication and collaboration,” said Michael Broder, CEO of Brightline Strategies. “When it comes to vitality and sustainable use of personal workplaces, this study helps us to identify the ‘persuasive factors’ and offers owners and operators the tools to engage them.”

The BOMA International COVID-19 Commercial Real Estate Impact Study was created with a grant from Yardi and developed by Brightline Strategies. This is the second in a series and was used from March to March May 2021 among 3,115 decision-makers for office space and high-ranking influencers from all over The United States with oversampling of respondents in the top 20 US markets. The first survey was conducted from September to October 2020 among 3,010 office space decision makers and high-level influencers in similar markets. The data was segmented and analyzed by industry, company size and growth phase, office space, rental price, renewal date, asset class, location and other key demographic and psychographic characteristics of the tenants.

The executive summary of this nationwide study can be found at boma.org/covidimpact. To request a full copy of the report, please contact [email protected].

BOMA International, Yardi and Brightline Strategies will host live online briefing sessions on the results of this study over the coming weeks. Press representatives are cordially invited to take part. Details and registration information are shared on boma.org/covidimpact.

ABOUT BOMA INTERNATIONAL
The Building Owners and Managers Association (BOMA) International, founded in 1907, is an amalgamation of local American associations and global subsidiaries. As a leading trade association for commercial real estate professionals for over 100 years, it represents owners, administrators, service providers and other real estate professionals for all types of commercial buildings, including office, industrial, medical, corporate and mixed uses. BOMA International is the partner that individuals in the commercial real estate industry choose to maximize value for their careers, organizations and assets. Her mission is to advance a dynamic commercial real estate industry through advocacy, influence and knowledge. More information is available at www.boma.org.

ABOUT YARDI
Yardi develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Yardi was founded in 1984 and is based in Santa Barbara, California, and serves customers worldwide. Yardi’s company motto is to take care of our customers, take care of our employees, take care of our communities, stay focused and grow. Yardi empowers the industry and the people in it through charitable contributions and philanthropic endeavors. For more information on how Yardi will be powered for tomorrow, please visit yardi.com.

ABOUT BRIGHTLINE STRATEGIES
Born from the science and discipline of political campaigning, we believe that real estate stocks are candidates and that every day is election day. For more than 20 years, we have endeavored to provide our customers with actionable information to shape their development, repositioning, programming, marketing and management strategies. Mitigate risk; Increase demand, preference and premiums; Expand portfolios across markets and borders; and maximizing the asset over the property’s life cycle. To achieve above-average returns in today’s hyper-commoditized real estate environment, you need to understand what’s important to whom, why, and how to capitalize on it. Brightline’s predictive, primary audience research gives owners and operators a key benefit – they can put their financial and human capital in the right places to properly grow NOI, increase asset liquidity, and maximize investment return. Please visit brightlinestrategies.com for more information.

Media contact

Courtney McKay, BOMA International, (202) 326-6352, [email protected]

SOURCE BOMA International