Office Market Discussion

[Alex Mackinnon]

But but... their target market in the IPO is the entire US economy! Er... uhh.

[jollyburger]

Originally Posted by cairnstone

I don't see WeWork surviving this market.

They were losing $400 million a month before Covid. Easier for them to blow up then survive.

[cairnstone]

Originally Posted by jollyburger

They were losing $400 million a month before Covid. Easier for them to blow up then survive.

Takes deep pockets to make a 400 M loss to feel like pocket change. And also lots of people have adapted to working at home so does paying for a shared office make sense.

[s211]

Originally Posted by Changing City

Presumably Spaces , Regus and other similar shared workspace operations will be facing a similar situation.

You don't have to presume. Regus is already telling landlords that either they get relief or go bankrupt in three months.

[Changing City]

Originally Posted by s211

You don't have to presume. Regus is already telling landlords that either they get relief or go bankrupt in three months.

Probably not surprising. They have some history of that sort of 'negotiating' over a long period. Although it's no doubt true that they face severe difficulties.

[s211]

Originally Posted by Changing City

Probably not surprising. They have some history of that sort of 'negotiating' over a long period. Although it's no doubt true that they face severe difficulties.

Over my too-many years, every single packaged office lease I've had to deal across Canada did not played out as expected, i.e. all on the downside, not upside, and that includes Regus.

[whatnext]

Originally Posted by s211

Over my too-many years, every single packaged office lease I've had to deal across Canada did not played out as expected, i.e. all on the downside, not upside, and that includes Regus.

I don't get the appeal of renting to packaged office outfits for landlords? Everyone seems to be shaky. Why not just cut out the middleman and rent the space directly?

[fredinno]

Originally Posted by whatnext

I don't get the appeal of renting to packaged office outfits for landlords? Everyone seems to be shaky. Why not just cut out the middleman and rent the space directly?

It's kind of a pain to rent to a hundred small tenants rather than 1 big one.

[jollyburger]

Originally Posted by fredinno

It's kind of a pain to rent to a hundred small tenants rather than 1 big one.

Regus is starting to franchise where the landlord manages more of the day to day operations

https://www.regus.ca/franchise

[BodomReaper]

Originally Posted by s211

Over my too-many years, every single packaged office lease I've had to deal across Canada did not played out as expected, i.e. all on the downside, not upside, and that includes Regus.

Regus are the absolute worst - in some cases they just get into pure con-artistry. And there's not much competition for them in the packaged office market. It's just a much better experience from a tenant perspective to rent a small office in an old Class C building, despite some of those associated quirks.

[s211]

Originally Posted by BodomReaper

Regus are the absolute worst - in some cases they just get into pure con-artistry.

I would, but can't, tell stories. The landlord always gets left holding the bag.

[whatnext]

This may be a taste of things to come. With pandemic-damaged finances companies will be looking at very possible way to reduce overhead:

TD Has Moved 9,500 Call Center Agents Home. Some May Stay There
By Doug Alexander
April 8, 2020, 2:00 AM PDT

Toronto-Dominion Bank is moving almost all of its call center employees from 15 different U.S. and Canadian cities to their homes in response to the coronavirus.

It has been a logistical challenge to shift more than 9,000 people but it’s working so well Toronto-Dominion may continue to offer it as an option in the future, a signal the pandemic may have long-term ramifications on everything from work to commercial real estate.

“Just 30 days ago we couldn’t even imagine having our contact-center agents working from home,” said Greg Smith, the senior vice president who oversees the centers in North America. “And 30 days from now we will have over 9,000 agents working from home.”...

https://www.bloomberg.com/news/articles/...y-stay?srnd=premium-canada&sref=x4rjnz06

[jollyburger]

WeWork is firing more people (300)

https://news.crunchbase.com/news/wework-lays-off-staff-as-part-of-a-realignment/

Their future:

[officedweller]

You'd fit more people in there with cubicles as workstations, even if you kept the sofas in the middle.

[s211]

Originally Posted by jollyburger

WeWork is firing more people (300)

https://news.crunchbase.com/news/wework-lays-off-staff-as-part-of-a-realignment/

Their future:

If they couldn't be a going concern before, I'll be curious how they suggest they'll be more viable at a lower density, unless wework somehow thinks that they'll get a hefty and permanent cut in their headlease rent.

[jollyburger]

Originally Posted by s211

If they couldn't be a going concern before, I'll be curious how they suggest they'll be more viable at a lower density, unless wework somehow thinks that they'll get a hefty and permanent cut in their headlease rent.

I think most landlords will go into it assuming they are on the brink of bankruptcy.

And larger customers of WeWork will be actively searching for their own spaces at better rates. Or then WeWork customers might want to pay less if their offering changes significantly.

[whatnext]

Interesting article in National Geographic about open offices.

Goodbye to open office spaces? How experts are rethinking the workplace.
The coronavirus pandemic is exacerbating workers’ worries about returning to jobs in these often debated floor plans.
5 MINUTE READ
BY SARAH GIBBENS
PUBLISHED APRIL 30, 2020

DISTRACTING, INTRUSIVE, AND now a potential health hazard. The list of grievances against crowded open office floor plans is mounting, and as state officials mull how to safely reopen offices shuttered by the coronavirus, some people are wondering whether the design is on its way out the door.

“Before [the coronavirus outbreak], I requested to move to a corner desk to kind of get away from the coworkers who were more social and talkative,” says Ayla Larick, an employee at a Texas insurance broker. Larick is set to return to her office on May 1, as Texas reopens non-essential businesses, though her asthma puts her at heightened risk for COVID-19 complications, and she’s requested an extension to work remotely.

“I am a little nervous about returning, only because I’m less than six feet away from three other people the entire time I’m working on my computer,” she says....

https://www.nationalgeographic.com/scien...501&rid=2D349843BD6FD4C0AACF8309A48DDD48

[s211]

Originally Posted by whatnext

Interesting article in National Geographic about open offices.

Goodbye to open office spaces? How experts are rethinking the workplace.
The coronavirus pandemic is exacerbating workers’ worries about returning to jobs in these often debated floor plans.
5 MINUTE READ
BY SARAH GIBBENS
PUBLISHED APRIL 30, 2020

DISTRACTING, INTRUSIVE, AND now a potential health hazard. The list of grievances against crowded open office floor plans is mounting, and as state officials mull how to safely reopen offices shuttered by the coronavirus, some people are wondering whether the design is on its way out the door.

“Before [the coronavirus outbreak], I requested to move to a corner desk to kind of get away from the coworkers who were more social and talkative,” says Ayla Larick, an employee at a Texas insurance broker. Larick is set to return to her office on May 1, as Texas reopens non-essential businesses, though her asthma puts her at heightened risk for COVID-19 complications, and she’s requested an extension to work remotely.

“I am a little nervous about returning, only because I’m less than six feet away from three other people the entire time I’m working on my computer,” she says....

https://www.nationalgeographic.com/scien...501&rid=2D349843BD6FD4C0AACF8309A48DDD48

Like virtually anything at the moment, it is WAAAAY too early to be announcing the death of anything. We're hearing it all right now: the death of urbanism, the death of density, the death of open workspaces, the death of transit. you name it, there's an expert out there telling us about a new death knell.

Just like how after 9/11, the death of high-rises was announced.

[whatnext]

Originally Posted by s211

Like virtually anything at the moment, it is WAAAAY too early to be announcing the death of anything. We're hearing it all right now: the death of urbanism, the death of density, the death of open workspaces, the death of transit. you name it, there's an expert out there telling us about a new death knell.

Just like how after 9/11, the death of high-rises was announced.

Perhaps, but it is hard to see how many modern office towers can function with strict social distancing. 2-4 people per elevator? How long will that take for everyone to get to their desk?

London has estimated the tube will operate at 15% of normal capacity if current social distancing is followed. Is that workable in getting people to offices?

[misher]

Originally Posted by whatnext

Perhaps, but it is hard to see how many modern office towers can function with strict social distancing. 2-4 people per elevator? How long will that take for everyone to get to their desk?

London has estimated the tube will operate at 15% of normal capacity if current social distancing is followed. Is that workable in getting people to offices?

In the short term we will indeed suffer. I do wonder if this will increase floor space demands as companies will need larger offices to practice distancing, or if the move to working from home combined with companies closing down/losing business will more than balance this demand out.

Long-term we should be ok. This is a simple virus with multiple vaccines going through testing and the American government is clearly ready to rubber stamp approvals. I won't be surprised if a vaccine is out for the masses by December. No idea what the delay between that vaccine coming out in America and it being approved and distributed here will be.