We’re already starting to see several companies accelerate their return to working in offices, but is this trend going to continue?
In this Fool Live video clip, recorded on April 20, Fool.com contributor Matt Frankel, CFP, asks Abby McCarthy, senior VP of investment affairs for Nareit, if office work will make a comeback in the post-pandemic world.
Matt Frankel: I wanted to pivot toward one of my favorites, which is office REITs, for just a second if we can. I feel like I’m the only person in the world who likes office REITs anymore, or who thinks that we’re going to work in offices after the pandemic, and want to go places, and things like that.
I know that you hold a lot of events, is another thing that Nareit does, and they’ve all been virtual, obviously, and are going to be virtual for a little while. Do you see in-person demand for group travel and things like that, and office work — and where do you see all that going in the next few years? Do you think it’s going to be like a quick snapback in those cases? Because you mentioned leisure travel will come back quickly; business travel, not so much. So when it comes to business activities, meaning travel and office work, do you think it’s going to be more of a gradual climb over the next few years, or how do you see that playing out?
Abby McCarthy: I think it’s still a little early to tell. I am encouraged by the vaccine rollout. I want to say today I even heard the statistic that 50% of American adults now have received at least one shot of the vaccine. That is very positive news for obviously the country in general, but also for real estate and for office real estate.
There’s a lot of speculation right now in terms of what the work-from-home movement that happened in the pandemic is really going to mean for the long term. I think it’s probably a little bit too early to tell; I think there are a few time periods where I think we’ll get more information. I think that by this summer, as we see the vaccination rollout continue, especially now…I live in the Washington, D.C. area and here, obviously they’ve opened up, for every adult now has access. I think that actually is countrywide to the vaccine.
So I think by this summer, it will be interesting to see if people start returning to the office with a little bit more regularity. I think the real key date, though, to watch will be Labor Day. I think after Labor Day, if we see kids return to schools, it will be interesting to see how much movement we see back into the office. Now, I think most people anticipate that there will be a move back to the office. Now, what that will look like, I think will be interesting to see. Right now, obviously there’s some major corporations that have talked about hybrid models and bringing people back into the office that, maybe only a couple of days a week. It seems like that might be what we see more in the short term.
I’m not sure over the long term how much that will come to be. It does seem like in major business hubs, in major areas, there is still a desire and a demand for people to congregate and be together and collaborate — not only for office culture, but also to be able to effectively train new employees and to integrate people into office culture. I think that over the next year, we’re going to see a lot of different scenarios play out. But my sense is over the long term, more people will be back in the office than anticipated today, but it’s still a little too early to make that prediction.
Frankel: That’s fair enough, that’s about where I am.
McCarthy: Yeah? Again, I think as people become more comfortable with public transportation and with the ability to get back into the office in a safe and comfortable way, where they’re comfortable around their coworkers…people change quickly. And I think that what we’ve seen, and obviously we’ve never lived through a pandemic before, but in other downturns in the real estate market, that there has been a resiliency. And I think there is this longer-term demand for people to congregate in a central location.
View more information: https://www.fool.com/investing/2021/04/29/will-office-work-make-a-comeback-after-the-covid-1/