It’s hardly a secret that the omicron coronavirus outbreak has forced a lot of companies to rethink their office reopening plans. And that’s on top of the delays employers were forced to grapple with when the delta variant took hold over the summer.
At this point, many companies that had wanted workers to return to the office in January are postponing their reopening plans indefinitely. And that’s not great for real estate investors — particularly those with office REITs, or real estate investment trusts, in their portfolios.
But a recent decision on the part of consulting firm Deloitte paints an even bleaker picture for office REIT investors. And if more companies follow its lead, it could deal a serious blow to the sector.
Is Deloitte resigned to remote work?
At this point, many companies have had their staff working remotely for almost two years now. And recently, Deloitte announced plans to offer its employees a tech subsidy so they can outfit their home offices with the equipment they need to do their jobs more efficiently.
From an employee benefits standpoint, it sounds like a nice perk. As far as revenue goes, it sounds like a solid investment in employee productivity. But from a real estate investing standpoint, it sounds a little bit like giving up.
Deloitte is offering staff members $500 apiece. Across its over 300,000 employees, that’s not a small investment. And it may also serve as an indication that the consulting giant has all but given up on workers being able to return to the office, at least anytime soon.
Now, the concern is that more companies will follow Deloitte’s lead — and take steps to make it easier for employees to do their jobs from home rather than take steps to make a workplace return more feasible. The reality is that the longer remote work continues, the more used to it employers and employees alike are apt to get. And that could prompt many major employers to rethink their office needs in the coming years.
But what about office space?
Dumping office space could be a big money-saver for employers. And they may decide to sink financial resources into helping workers do their jobs remotely rather than maintain leases, all the while dealing with the hassle of establishing COVID-19 vaccine policies and testing requirements.
The emergence of omicron has shown us that the COVID-19 pandemic is full of surprises — and not necessarily pleasant ones. While the variant is, according to health experts, showing signs of causing milder illness, its high level of transmissibility had made it a threat many weren’t prepared for.
While it’s easy to hope that the pandemic won’t take a turn for the worse, it’s hard to say whether a new variant will emerge to cause even more havoc. All this means employers may just resign themselves to keeping workers remote until things take a notable, prolonged turn for the better. It’s an unfortunate reality office REIT investors will have to brace for as we navigate these uncertain times.