Almost half of all tenants likely to reduce square footage – survey

A study of the COVID-19 pandemic’s impact on commercial real estate, commissioned by the Building Owners and Managers Association International (BOMA), has found that office users face widespread economic challenges but many remain convinced that in-person workspaces are crucial to their operations. They noted, as well, that landlords and property managers have successfully adapted to new needs during the pandemic.

The survey canvassed more than 3,000 office space decision-makers and influencers from August through October and was developed by Brightline Strategies. Survey data pointed to significant changes in the form and function of offices in the future despite a core need for physical space.

“The demand for office space, generally speaking, is still pretty strong, even amid this global pandemic,” Michael Broder, president & CEO of Brightline Strategies told Commercial Property Executive (CPE).

It’s more how the space is used than whether it will be used at all, Broder said, noting that this will also change how tenants calculate how much space they need.

While 65% of survey respondents said they are personally comfortable with returning to the office, only 59% said their employees or colleagues feel the same way. 61% said they will reassess their space needs.

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Forty-three per cent (43%) of the total group of tenants surveyed say they would likely reduce their square footage.

Fifty-three per cent (53%) of tenants surveyed said they have held or are considering holding “serious negotiations” with their landlords about downsizing, according to CPE.

Eighty per cent (80%) of tenants, however, said they approved of the COVID-19 response their office landlords and property managers made and almost half said they are more likely to renew their leases based on that response alone.

“People are going to want to build in more flexibility in the future,” said Henry Chamberlain, president & COO of BOMA International, “Technology has proven we can work from home. It’s not the same, and it’s not as collaborative and creative, but it works.”