Investing in Office Space? Here’s What to Look For

To say it is a precarious time to invest in office buildings would be an understatement. Office buildings have been largely empty since the pandemic began as companies acted cautiously and directed employees to work remotely.

Over the summer, as COVID-19 vaccines became available, many employers began specifying plans to reopen, only to postpone those plans when the Delta variant caught on. In response to the highly transferable Omicron variant, companies are now switching again and delaying office returns. Some actually postpone that return indefinitely and don’t even bother setting a target date for staff reintegration.

Still, some real estate investors may want to take a risk on office buildings, despite the blow the pandemic has dealt them. However, if you are looking to invest in office space, these three most important things are worth paying attention to.

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1. Built-in parking space

While employees may be called back to offices at some point, many will no doubt hesitate to get on public transit while COVID-19 is still an issue. That could lead to an increase in journeys to work – and a strong demand for parking.

For this reason, it is worth looking for office buildings or complexes with integrated parking spaces. These locations are more attractive to tenants as the availability of parking spaces solves a logistical constraint on the way to a more robust office return.

2. Improved technology

Even if employees return to the offices at a more robust pace, there is a good chance companies will maintain hybrid arrangements for long periods of time in which employees do part of their work from home. But office buildings need the right technology for this. Buildings that offer better internet connectivity and dedicated rooms for remote meetings are likely to attract more tenants than those that do not adapt to the need for hybrid setups.

3. Outdoor equipment

The pandemic has taught us to use nature – not only for training, but also for everyday functions. Now companies can look for ways to let workers do their jobs in the open air. And, in particular, they can try holding larger outdoor meetings to limit potential exposure to COVID-19 (or any other communicable disease). Therefore, office buildings with outdoor facilities such as seating and tables in the inner courtyard could gain an advantage in the short term.

Short-term but manageable risk

Obviously, some real estate investors are looking to stay away from office buildings right now. But while office REITs or real estate investment trusts can pose a short-term risk, ultimately it is clear that office buildings are not out of date.

Without the recurring COVID-19 surges, many companies in traditional office environments would be working normally again. And so, investors interested in office space may really only have to weather a few waves of COVID-19 for the sector to stabilize.

However, the pandemic has certainly changed the way businesses operate, which has resulted in a shift in office building amenities that renters are most likely to find desirable. So if you are looking to invest in office space, look out for the features above.