Will Workers Return to the Office Faster Than we Think?

At Willow Creek Partners we like asking the tough questions. And one of the toughest questions in commercial real estate right now is; when office buildings will see anything close to their full capacity? Thankfully, today we do not have a dog in this fight, but as opportunistic investors, we watch a train wreck with an eye toward the future and what opportunities could emerge from the wreckage. Please do not mistake this as an indication that we are getting ready to hop into office, but we have seen anecdotal stories that do suggest that the recovery could be quicker than the current headlines may have a person believe.
First, the tech layoffs…for the better part of the last decade, tech workers have not had to fear for their jobs. Even if they were to lose a job, there was always an immediate opening somewhere else. Frankly, it made things very difficult for managers and companies. Some of these employees didn’t respect their employers enough to listen when the initial requests were made to return to the office. While it is rarely “good” that people are getting laid off, it is healthy that employees have to remember what it was like to respect the people writing their paychecks. Frankly we’re starting to see management teams assert themselves more and more. For instance, the Wall Street Journal reported last week that Walmart will be closing
three technology hubs and insisting employees return to the office. There is without a doubt a dip in real estate investment that comes first, but this does feel like an important part of the bottoming process and Walmart is far from alone. Apple, Disney, Google, Goldman Sachs, Citigroup and Salesforce are all asking the same of their employees and there are many more. Will there be some hoteling and/or hybrid work involved at all of these companies? The answer is likely yes, but the argument that “we’re just as productive at home” is not flying with these blue chip companies and that will likely have ripple effects sooner rather than later.

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