In March, commercial real estate optimism projected a return to “normal” in the fall in Washington State. When giant office users sent their workers home it was “temporary”, and all would return. At the end of summer, Washington State is still locked down and only in Phase 2. According to BOMA (Building Owners and Managers Association) we have millions of square feet of office space running at 5-7% of capacity. Have you been to a doctor’s office lately or gone to the gym to work out? The world has changed but the shape and form of office real estate is changing too.
Outside air is cleaner and from an environmental and energy standpoint, more costly. UV, new filter systems, biological cleaning systems, social distancing in the building are issues. Elevators to accommodate the distancing mandate can only carry say four passengers at a time. Grab a sandwich for lunch, in your now closed restaurant on the main floor or the former Starbucks? Staggered hours, part time work from home, impacts on commuting, and more importantly the impact on business performance and efficiency are material factors at play. How do we address these issues on a long-term basis? From a liability standpoint the potential for litigation is staggering. Who cares? Commercial real estate professionals had better care as these “hidden” costs are most certainly going to be passed through to consumers and the cost to consumers is a drag on the economy. The issue of litigation and contingent liabilities is a national issue not only a local issue.
Commercial real estate is changing and Seattle Commercial Real Estate cannot blithely go along basing our outlook for the future on what has happened in the past. It is an exciting, challenging time and a time to use common sense to prepare yourself to ride the next wave.