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  #21  
Old Posted Nov 19, 2020, 1:01 PM
jtown,man jtown,man is offline
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Originally Posted by uaarkson View Post
Remote work won’t be permanent, case closed
Case closed? My girlfriend's company has moved to 100% remote. They are not resigning a new lease in January.

That's one company, how many others will also do the same?

So no, the case isn't closed. Its just a matter of what percentage will stay 100% remote.
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  #22  
Old Posted Nov 19, 2020, 2:54 PM
dave8721 dave8721 is offline
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Quote:
Originally Posted by jtown,man View Post
Case closed? My girlfriend's company has moved to 100% remote. They are not resigning a new lease in January.

That's one company, how many others will also do the same?

So no, the case isn't closed. Its just a matter of what percentage will stay 100% remote.
We are moving to a shared office thing and drastically reducing space.
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  #23  
Old Posted Nov 19, 2020, 3:03 PM
Investing In Chicago Investing In Chicago is offline
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Originally Posted by uaarkson View Post
Remote work won’t be permanent, case closed
Perhaps it needs to be stated, but I don't think a single person would say 100% of all employees will move to a full time WFH model for the rest of human existence. However, it is plausible to think that moving forward, the percentage of people who work from home will increase, and that decrease in demand for office space will potentially create conversions of office space into other uses. This is obviously at the Macro level, the increase/decrease in WFH will obviously need to be evaluated at each individual market.
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  #24  
Old Posted Nov 19, 2020, 5:05 PM
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hipster duck hipster duck is offline
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My uneducated guess is that we see the need for on-premises "desk space" fall by up to 40%, as a result of some companies moving fully to WFH, and most companies adopting a WFH one or two days a week strategy.

But I think that even if your average company drops the number of desks it has by 20-40%, that space will get repurposed to something else work-related. Either more meeting/collaboration space or - paradoxically - space required to accommodate collaboration for teams where someone on the team is working remotely. For example, if I needed to just talk with a group of my team members quickly, we'd just move our chairs together in a circle. If one person works from home, we have to book a meeting room and put them on-screen.

Just thinking about my own job pre-Covid, I might have spent 40% of my total work time at my desk. The rest of the time I was shuffling around meetings or standing at the whiteboard near my team's workspace, or working out of the office (outside meetings, business trips, business lunches, etc.). A lot of this stuff won't result in a reduction of leased space - at least not in a way that we can predict in a straightforward way.
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  #25  
Old Posted Nov 19, 2020, 10:22 PM
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PoshSteve PoshSteve is offline
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We've been seeing some interesting things on this front in Cleveland. All of our old empty office buildings downtown have been redeveloped as residential/hotel (the last one is supposed to start work in a couple of month). Here's a cool recent article about office to residential conversion nationally that focuses on the success in Cleveland recently: https://www.rentcafe.com/blog/apartm...ed-apartments/

Regarding the future of office work in the city, we haven't seen any slow down in offices relocating to downtown. Alot of them have downsized in space from their suburban locations, but some of them have increased too. I think its mostly a wash right now. One company, CrossCountry Mortgage just announced moving their HQ and 1500 jobs from the suburbs to downtown. What's really interesting is they will be developing a residential component along with the offices. They're going to be marketing it to employees first who would then be able to work from home, but be in close proximity to the office for meetings and collaboration. Sherwin Williams, who is about to start on their new HQ tower downtown also said they will not be having much WFH in the future either, and will have all of their employees back in the new HQ. They said the value of collaboration is too important compared to any potential cost savings from less office space.
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  #26  
Old Posted Nov 27, 2020, 12:51 AM
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paytonc paytonc is offline
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I wrote an article about some of the spatial challenges involved with office conversion, particularly the postwar buildings that make up most Sun Belt office stock:
https://ggwash.org/view/78585/not-ev...e-apartments-2

TLDR, it's possible but unlikely, mostly because they're too deep. People like to have windows in their bedrooms, but bosses don't like to have too many windows. It's also much more expensive to do so than you think.

Which brings me to the economics: a low-rent office ($20/sq ft/year) brings in about as much money PSF as a high-rent apartment ($2/sq ft/mo), when you balance out things like hallways (apartments have many more) and property taxes (offices pay their own, apartments don't). So the building has to be *really* low-end office to justify the (again, higher than you think) costs of construction.

Pre-war buildings are a lot easier to convert because (a) they're much thinner, having been built before fluorescent lights & forced-air ventilation, and (b) historic tax credits and property tax incentives can substantially offset the cost.
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  #27  
Old Posted Nov 27, 2020, 9:12 PM
mhays mhays is offline
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Good article.

I'd add that seismic regions have an added challenge. And costs can easily get to multiples of that $100,000 figure.
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  #28  
Old Posted Nov 28, 2020, 4:44 AM
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I now live in a converted office building, FWIW. But it was built over 100 years ago. It seems like the NE loop has been becoming more and more residential even before COVID-19.
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