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Originally Posted by HomrQT
I think with so many people working from home for months it will have a lasting impact that will cause office demand to stay down for a long, long time - even after all restrictions are lifted. Hopefully a lot of these buildings pivot and convert to residential or hotel.
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In Chicago, office and residential growth are related. The massive growth in office workers in the central business district over the past decade was driving demand for residential space. While Chicago's population as a whole was stagnant or even fell slightly, the population of the Loop, the West Loop, South Loop, West Town, River North, etc. was exploding. These were some fo the fastest growing neighborhoods in the entire country. If the pipeline feeding demand for new office space runs dry, you can bet that the demand for downtown residential space - condos and apartments - is going to dry up as well. And it's not like you can easily flip an office building into a residential use. That requires a lot of hoops and major modifications to the infrastructure of the building itself.
The important thing to keep in mind is that no one knows anything. No one knows how this will or will not affect demand for office space in 2, 5, or 10 years. This could all be a temporary thing that lasts another 6 or 18 months and then life returns to normal when treatments and hopefully a vaccine becomes widely available. Or it could permanently alter the way we live and work. Open office concepts will die and people will demand apartments with a home office or den so they can work from home 2 or 3 days a weeks. Or maybe something else happens. I don't know. And I don't think anyone that claims to know really does (or is trying to sell you something). We want to know, but we'll just have to wait and see.