Is the whole WFH cultural shift threatening cities a NA centric problem?

[eschaton]

Originally Posted by Crawford

I don't think it's a given that transit usage has permanent declines. Most U.S. transit riders aren't choice riders, and the choice riders tend to be in the fancy superstar cities, using the trophy office space that's most in demand. The MTA and other big city agencies are projecting they'll hit pre-pandemic ridership by 2025 or so, which doesn't sound crazy.

The issue with ridership is farebox recovery tends to be best on rush-hour lines that commuters use. University lines (which tend to get heavy traffic throughout the day) are a distant second. But off-peak transit into CBDs - along with "spoke-to-spoke" transit has always been a money loser.

[twister244]

I think where things end up are still being figured out.

I just can't see a reality though where companies require the same amount of office space as pre-pandemic. I think that's folks here being overly optimistic as that's a great justification for more office towers in their cities. And this is a skyscraper forum after all.....

Yes, some people are going to go back 4-5 days a week because they need to be around their co-workers. But many folks are going to only go in 2-3 days a week now instead. So, if you are a company, are you going to lease up enough space to give every employee a desk or office if they are only going to come in a couple days a week? Or.... Do you lease up a smaller office plate with more co-working space for folks to come in and use. Maybe companies implement a system like WeWork where you need to reserve a desk/office if you are coming in. You get the best of both worlds. You save money on office leases, while also getting people back in.

Some companies may use the WeWorks of the world if they are small enough. A handful of employees come in and rent an office or use open space when they need to collaborate in-person. In that case, you would think more office space will get converted into co-working spaces under WeWorks or Industrious.

But aside from that, there will definitely be more people going fully remote now. I'm one of them. I have interviewed a few companies over the last few months where half of them have turned me down because they want me to move to city X or Y. I respectfully said no as I wish to be based out of Chicago and have the option to work remotely. But, I have also interviewed with smaller group that are totally OK with me being remote. I know other folks who have picked up new jobs with companies where the job is fully remote.

Of course nobody expects major firms to have their entire organization be fully remote. If you are big enough, you will just have enough people coming in as they will want to. Not every single person wants to be fully remote. My decision to be remote is because I want to be in Chicago, and most of the jobs I have been applying for are with groups outside of Chicago because my job is heavily specialized. If I joined an organization that was based in Chicago, then I would go in. I use WeWorks during the week because I can't stand working from home. But that doesn't mean I hate working remotely.

There's a huge spectrum of scenarios that people are sifting themselves into. But no doubt we live in a new world now. To suggest we are going back to exactly where we were in 2019 is to ignore the reality we have in front of us.

[EastSideHBG]

Originally Posted by Crawford

Obviously, yes. That's the issue.

It's a given that companies will be more flexible post-pandemic, which doesn't mean they'll need any less office space, and which doesn't mean that the vast majority of employees won't be in-office at least part-time. That's very different than claiming that employees won't be in the office at all.

For most office jobs, at least in NYC, pre-pandemic, people were on 4, 4.5 or 5 day schedule (summers were half-day Fridays in every job I've had since college, and Fridays were almost always flexible year-round). At least right now, it seems that most office jobs are back to 2-3 days already, or starting in January. And many are planning to require additional days down the road. That's a very different scenario than what's being claimed.

Class A office rents are now higher than pre-pandemic. That certainly suggests that both landlords and tenants expect employees to be in-office at least part-time.

Like most things I would not compare NYC to the rest of the country, as NYC has way more to lose office space-wise and being one of the world's capitals the optics of that alone may dictate that an office culture of some sort may be important.

Of course the rents are higher, everything is. Under the circumstances I would not use the usual formulas because the pandemic, inflation, etc., has turned just about everything on its head.

Originally Posted by twister244

I think where things end up are still being figured out.

I just can't see a reality though where companies require the same amount of office space as pre-pandemic. I think that's folks here being overly optimistic as that's a great justification for more office towers in their cities. And this is a skyscraper forum after all.....

Yes, some people are going to go back 4-5 days a week because they need to be around their co-workers. But many folks are going to only go in 2-3 days a week now instead. So, if you are a company, are you going to lease up enough space to give every employee a desk or office if they are only going to come in a couple days a week? Or.... Do you lease up a smaller office plate with more co-working space for folks to come in and use. Maybe companies implement a system like WeWork where you need to reserve a desk/office if you are coming in. You get the best of both worlds. You save money on office leases, while also getting people back in.

Some companies may use the WeWorks of the world if they are small enough. A handful of employees come in and rent an office or use open space when they need to collaborate in-person. In that case, you would think more office space will get converted into co-working spaces under WeWorks or Industrious.

But aside from that, there will definitely be more people going fully remote now. I'm one of them. I have interviewed a few companies over the last few months where half of them have turned me down because they want me to move to city X or Y. I respectfully said no as I wish to be based out of Chicago and have the option to work remotely. But, I have also interviewed with smaller group that are totally OK with me being remote. I know other folks who have picked up new jobs with companies where the job is fully remote.

Of course nobody expects major firms to have their entire organization be fully remote. If you are big enough, you will just have enough people coming in as they will want to. Not every single person wants to be fully remote. My decision to be remote is because I want to be in Chicago, and most of the jobs I have been applying for are with groups outside of Chicago because my job is heavily specialized. If I joined an organization that was based in Chicago, then I would go in. I use WeWorks during the week because I can't stand working from home. But that doesn't mean I hate working remotely.

There's a huge spectrum of scenarios that people are sifting themselves into. But no doubt we live in a new world now. To suggest we are going back to exactly where we were in 2019 is to ignore the reality we have in front of us.

Agreed.

[JManc]

Originally Posted by EastSideHBG

Have you been living under a rock? The below link is just one list and there are many now. My company has been hiring all over, permanently remote positions, and there's a chance I may never have to go back (and if I do it will be rarely).

https://weworkremotely.com/21-compan...me-permanently

People have gotten too used to this model and there are a lot of benefits for employers. I have discussed this topic in a few threads so if you're curios here's more of my thoughts: https://skyscraperpage.com/forum/sho...0&postcount=23

I work for one of the tech companies on the list and yes, they do allow for some people to WFH permanently (with salaries adjusted) but they require most to work in the office (I have to move to the Bay Area) and I have a friend who works for the Googles and she works out of their office in the Austin area. We are all WFH until January due to Covid.

Both of our companies are building new office space like crazy so the 100% WFH model is not in the cards anytime soon. Probably will never be.

[10023]

Not necessarily.

I think (and hope) that flexible working is here to stay. But even if it is for all but the most backwards, boomer-dominated firms, we won’t lose anything good from cities.

Public transportation may be less overcrowded at rush hour, and soulless office districts may not need as many chain sandwich and salad places for the lunch hour crowd. But the cities where people want to live because of the amenities they offer will still be desirable. Cities will still be the places with the best restaurants, the best bars, the best live shows, the best galleries, etc. They will always be the centers of culture, as they have been for as long as culture has existed.

If anything, the fact that most people will be working from home at least part time is worse news for downtown Houston or Canary Wharf than it is for Downtown Manhattan or Chicago’s Loop. The latter have more scope to adapt if there’s less demand for office space, because people will want to live there.

[EastSideHBG]

Originally Posted by JManc

I work for one of the tech companies on the list and yes, they do allow for some people to WFH permanently (with salaries adjusted) but they require most to work in the office (I have to move to the Bay Area) and I have a friend who works for the Googles and she works out of their office in the Austin area. We are all WFH until January due to Covid.

Both of our companies are building new office space like crazy so the 100% WFH model is not in the cards anytime soon. Probably will never be.

That's interesting and thanks for the info! I guess it will all come down to the industry and what culture they think works best for them. But from what I am seeing in mine permanent WFH is here to stay for most employees.

[Investing In Chicago]

I worked for Oracle from 2012 - 2020 and went into an office MAYBE 20 times, and it was our office in Reston, VA never the office in Chicago (where I lived), ironically the only time I went into the Chicago office was to drop off my laptop when I quit. Oracle basically has their entire field sales org as remote, regardless if you live in a city with a significant office presence (Redwood city, Reston, Austin, Burlington MA), there just isn't any reason for a field sales org to be in an office environment.

I currently work for Amazon Web Services, where I've noticed about half the field team does go to the office at least once a week (at least those I interact with), and it's much more common for non sales roles (marketing, client success, etc) to be in the office at least partially. I have no idea what Amazon plans to do with their big office announcement in Crystal City, but I doubt they need the office sq footage they thought they needed pre pandemic.

My wife works for Salesforce, and pre pandemic they were very firm on people being in the office (she was in the office 4x per week), post pandemic, they've left it up to the individual. She hasn't been in an office in over 18 months, and doesn't plan to ever return.

[10023]

^ That’s always the case in sales though isn’t it? At least high-value, technical sales. It’s the same for pharma sales reps. If you’re sitting in your own office, you can’t be doing your job.

[Investing In Chicago]

Originally Posted by 10023

^ That’s always the case in sales though isn’t it? At least high-value, technical sales. It’s the same for pharma sales reps. If you’re sitting in your own office, you can’t be doing your job.

Pretty much, but it certainly could apply to many other customer facing roles (CS, Implementation, etc) as well. At least in my opinion.

[JManc]

Originally Posted by EastSideHBG

That's interesting and thanks for the info! I guess it will all come down to the industry and what culture they think works best for them. But from what I am seeing in mine permanent WFH is here to stay for most employees.

My company rebranded itself and is preparing for when everyone is eventually WFH but is able to 'check in' virtually unlike Zoom or Microsoft Teams today but that's further down the pipeline. I am a business analyst and for now, my line of work is more conducive working with people face to face, you lose something remote.

[badrunner]

It could be a NA specific problem simply because NA cities are designed differently - greater separation of uses, longer commutes, smaller resident populations in the core. A lot of these suburban commuters have no reason to be downtown if not for work.

[10023]

^ That is a very good point which I meant to make and should have made more explicitly. But it’s what I meant by “soulless office districts” (places with a bunch of glass skyscrapers but where no one wants to be) being the losers in all this.

Although it’s not so clear cut between North America and elsewhere. Cities like London and Paris also have huge daytime populations in their central cores relative to their residential populations. The City of London is actually a pretty “American-style” CBD not dissimilar demographically to New York’s Financial District. But the centers of these cities are also where locals and suburbanites play and shop as well as work, in a way that downtown Dallas is not.

Originally Posted by Investing In Chicago

Pretty much, but it certainly could apply to many other customer facing roles (CS, Implementation, etc) as well. At least in my opinion.

Well, yes and now. Accountants and lawyers also meet with their clients but they spend a lot of their time doing the background work. I’m not sure what a sales guy is doing other than sales calls.

[Investing In Chicago]

Originally Posted by 10023

Well, yes and now. Accountants and lawyers also meet with their clients but they spend a lot of their time doing the background work. I’m not sure what a sales guy is doing other than sales calls.

Working with internal deal desk (CRM System, Legal, SOW's, etc.) structuring a deal is the biggest non client facing time suck and I find no issues with working that remote.

[JManc]

Originally Posted by badrunner

It could be a NA specific problem simply because NA cities are designed differently - greater separation of uses, longer commutes, smaller resident populations in the core. A lot of these suburban commuters have no reason to be downtown if not for work.

We live in an exurban area (30 miles from downtown, where my wife works) and if she worked from home, we'd still go into town regularly. Plenty of things to do there compared to where we live. The implication that people wouldn't have to go into town if they did WFH would not be a good thing as if people already didn't have issues creating their own bubbles reinforced with services like Instacart and Doordash and refusing to leave the house as it is.

[digitallagasse]

The company that I am with let most departments decide on WFH. Some departments have zero ability to work from home and hence never went WFH. For those departments that could choose many choose a hybrid approach. Even with that approach many of those departments mostly work from home. Some departments that use to be in the office have gone fully WFH. For example my department is fully WFH. We no longer have a dedicated space in any office. Due to this reality two offices have been fully closed and as additional leases come due I am expecting at least another two to four offices will close down as well. The remaining office space is being redesigned to best suite those that still need to use it. Instead packing people in is remote offices all over the place it is moving to a few premium offices. That and consolidating offices in a given metro to a single office. A process that has already started in the company. Many departments have already hired a considerable amount of people outside of areas that have an office. Other than a few select positions that never happened before.

For my department it really didn't matter. Even when we were all in the office we were spread out over several distant offices. Going to WFH had little to no impact on my department.

[twister244]

Originally Posted by 10023

Although it’s not so clear cut between North America and elsewhere. Cities like London and Paris also have huge daytime populations in their central cores relative to their residential populations. The City of London is actually a pretty “American-style” CBD not dissimilar demographically to New York’s Financial District. But the centers of these cities are also where locals and suburbanites play and shop as well as work, in a way that downtown Dallas is not.

Personal observation here, but to me, the WeWorks in London and Paris were much busier than in Chicago. Maybe a better comparison would be NY to London/Paris. The WeWorks I have been to seem to have many more groups of employees from small companies that come in and collaborate within the open-desk environment. It was pretty fun to see that level of energy. Maybe the WeWorks in US major cities will become more energetic with time, but you can tell there are several smaller companies that benefit from an environment like this as opposed to having to sign into a lease in an office building.

Remember, with WeWork, you can go to any location. The global access pass allows me to drop into any WeWork I want in the world (where they are available). Does that guarantee me a nice office? No, but I always have an open desk environment where I can work and be around people.

[twister244]

Also,

Here's a good CNBC article discussing a breakdown of who is expected to come back to the office over the coming months. Granted, it's NYC, but it presents some interesting statistics worth digesting.

https://www.cnbc.com/2021/11/10/only...e-office-.html

[Centropolis]

My company is eliminating most offices in North America, we had to fight to keep a small one since we have so much company owned equipment. Being an environmental and sustainability consultant they are offloading their carbon footprint on paper…

[SFBruin]

Are there any statistics on whether urban or suburban office spaces have been recovering faster since the peak of the pandemic?

[Obadno]

I think this is a good thing overall.

Nothing wrong with offering people more mobility and it can easily be a lifeline for smaller cities around the country if people can take their higher city incomes and instead live in a smaller medium sized metro or even a small city or town where they might prefer to live or where they can achieve their dreams like owning a home or having a larger family or whatever they want to do.

How can people get upset over offering people more freedom and empowerment in this way?

This whole process could unironically save dying towns across the entire united states and improve others even if they arent in such dire straights.