Some lessons of COVID might influence commercial real estate and offices for some time

There’s hope and optimism throughout the country that we could be coming to the end of the COVID-19 pandemic. While it’s unlikely we’ll eradicate the disease, we’re getting closer to returning to normal life every day. 

For example, as of this writing, Florida is now devoid of COVID restrictions and averaging about 3,300 new cases daily. Even after a spike from the spread of the contagious delta variant of the virus, this is a significant drop from the 15,000 daily cases the state experienced just months ago. 

The vaccine roll-out is a significant reason for the decrease in cases, as over 54% of Florida residents have received at least one dose. About 10% of Florida residents tested positive for the virus, too, adding to the state’s herd immunity. 

Despite the lack of restrictions and high immunity in Florida, some behaviors could stick around permanently. We know that COVID-19 spreads through close interactions with others, so taking some precautions in anticipation of the next pandemic might be attractive for tenants and building owners. 

Here’s a look at some changes we could see stick around in the post-COVID world. 

End of the open office

The open-concept office makes sense in many ways because it uses space more efficiently and can create collaborative locations within the workplace. However, this office setting also allows germs to spread quickly because there aren’t any barriers separating people. 

We saw offices all over the country add plexiglass between workspaces to reduce viral spread. And the pandemic might be the nail in the coffin of the open office concept altogether, a layout that was already under fire from researchers and workers before the pandemic. The demise of the open-concept office could come quickly if a portion of employees remains hesitant to return to the office because of perceived risk.

Offices may need to remain flexible spaces, too, as more workers demand remote work arrangements, at least part-time. Overall, the durable trend seems to be that while office space will bounce back, companies will need more adaptable spaces and less overall square footage.

Decreased urban densification

Another trend we’ve seen over the past year is people moving away from major cities and into the suburbs. 

Large American cities like New York and Los Angeles had a rough time through the pandemic. New York City alone had nearly one million cases, and Los Angeles County had 1.25 million

Being close to strangers during the pandemic wasn’t appealing for most Americans. And when you combine the emerging remote workforce and the cost of living in those urban centers, it made sense to move away. Still, we don’t know if this trend will continue or for how long. A lot of it will depend on employers’ willingness to allow staff to work remotely and employees’ willingness to commute. 

But if the work-from-home movement is permanent—and for now, hybrid arrangements seem to be the minimum model—there’s less reason for the upcoming generation to pay the sky-high prices in these major cities or attempt to raise families in an urban environment. The result could be decreased densification and some downtown apartment buildings and offices that need a new purpose.

The possibility of updated building codes and best practices

Another effect we could see in the coming years is updated building codes and architectural and engineering best practices to mitigate future pandemics. For example, HVAC systems might require additional filtration to stop viruses from moving throughout a building and infecting dozens of people. 

Some analysts speculated that cities might amend rules on the amount of square footage required per person in a building or put additional limits on the amount of enclosed space within an office. Further, the idea of decreased capacity in elevators, common areas, and lunchrooms would undoubtedly change the way the office operates. 

While many of these ideas seemed likely during the height of the pandemic, the rapid success of vaccines may mitigate quick, drastic changes to government codes, which are based on model codes with a three-year planning cycle. And governments often adopt these new model codes as law years after a new one is published.

What may be more likely will be adopting voluntary best practices by architects, system engineers, and building owners that result in healthier buildings. Enhanced HVAC systems and flexible, less dense office space, for example, are items that both future-proof a building against another pandemic while providing appeal that differentiates properties regardless of health threats. 

Voluntary building certifications and principles that include health benefits, such as the WELL Health-Safety Rating, Passive House Design, and LEED ratings may lead the way in this regard.

Planning for the future

COVID-19 is a learning opportunity that will help us stop the spread if a more deadly virus emerges in the future. While this pandemic was awful and the loss of life is staggering, it could have been much worse. We don’t yet know what precautions will become necessary moving forward, but the situation is worth monitoring for any CRE investor.

Morris Southeast Group can assist commercial real estate investors in monitoring their portfolios and staying up to date on any changes tenants require as we move past the pandemic. We’re available at 954.474.1776 to speak with you today. You can also reach out to Ken Morris directly at 954.240.4400 or