Could coronavirus change future office needs?
COVID-19 is slowing activity in South Florida’s office and retail markets, according to local brokers. And the impact may last beyond a few weeks.
“There’s more of a short-term effect on the retail market. Less people are going to be shopping and dining out. That will bounce back,” said Ken Krasnow, the vice chairman of institutional investment services for Florida for Colliers International. “We are starting to hear about long-term impacts on the office market.”
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Several retail tenants and landlords are discussing rent relief, Krasnow said. “We’re not seeing it yet but we are expecting it for the hospitality and retail markets. When people are not leaving home and there are no events, some of those industries are going to suffer and need relief.”
Office towers remain open but employees are taking precaution when interacting with others, said Cushman & Wakefield Vice Chairman Brian Gale.
“I’ve heard people say, ‘We’re not touching,’” he said. “I’ve seen people wait for an empty elevator. People aren’t hugging or kissing. They are fist bumping, putting out their elbows or not touching at all.”
Property managers, Gale said, are keeping offices open. They plan to close an office tower if they receive notice of a visitor infected with the virus visiting the building. Instead, they are adding sanitizing stations by entrances in the lobby and garage floors.Desks are also cleaned every evening.
Some employees are working from home as the number of COVID-19 cases grows in Miami-Dade County and Broward. This is forcing companies to re-think office use in the long run, Krasnow said.
“Tenants are re-evaluating polices in terms of flexible hours and having spaces closed off in open floor plans,” Krasnow said. “It may have a fundamental impact in terms of office design and layout. It’s going to change how companies utilize and occupy space.”
This story was originally published March 16, 2020 at 7:00 AM.
