MASS NEWS – OCTOBER 30, 2021 As we round third base and enter into the home stretch of 2021, the future in many ways feels just as uncertain as it did this time last year. After the turbulence caused by the coronavirus pandemic in 2020, what was supposed to be a year of stability has in many ways only brought about more questions that are as of yet unanswered.
In the United States, one of the biggest unknowns is the future of the workplace. COVID-19 dealt a huge blow to office markets across the country, and that has made many experts consider investment in commercial real estate to be particularly risky due to the uncertainty regarding the impact remote working will have on the future. While no metropolitan area is completely immune to that concern, the South Florida region has seen an influx of relocations by businesses and business people alike that may indicate the makings of a swift comeback.
Industry insiders like Stephen Bittel, founder and chairman of the commercial real estate firm Terranova, are maintaining a sense of optimism about the region’s office market as companies and executives –– particularly in the technology and financial services sectors –– are making their way to South Florida in record numbers. Having worked to build Terranova for over four decades to become one of the top CRE firms in the area, Bittel’s knack for maintaining a finger on the pulse of the Miami-Dade area has given him the ability to be predictive and provide unique insights. Will these moves make up for the hits taken by the office market as a result of the coronavirus pandemic? Below we explore further what lies in store for offices.
The ramifications of COVID-19
Like practically every other region in the United States, office occupancy declined in Miami-Dade county during 2020. The declaration of COVID-19 as a pandemic saw companies downsize or outright close, causing leasing activities to stall for most of the year. Even by the beginning of the second quarter of 2021 office vacancy rates were significantly higher than they were the year before, jumping from 16 percent to 19.3 percent according to statistics provided by JLL. Although for many businesses goals to have their workers back in an office by Labor Day were stalled by the spike in cases as a result of the Delta variant, as the vaccination rate in the United States continues to rise it appears that it is finally becoming a viable option. The question remains though: will people choose it?
Rethinking the office
Ask any given expert and you will get a different answer as to the future of offices in a post-pandemic world. A study conducted by the University of Chicago’s Becker Friedman Institute for Economics found that 21 percent of work post-pandemic will be conducted from home, compared to just 5 percent before COVID-19. Some employees have even gotten so used to the quick commute from bed to dining table that they have expressed a willingness to take a pay cut in order to continue working from home.