Physical vs. Online Office SpacePosted August 9, 2021 by Articles & Publications, Real Estate Publications, The Law and Other Musings in
As the nation slowly emerges from the COVID pandemic that shut down so many offices, a question that both commercial landlords and tenants must consider is “How important to my business is a physical office”?
As most of us have discovered in the past 19 months, many businesses can conduct their affairs online, with no degradation of their day-to-day operations. Doctors are now seeing many patients through virtual visits using Zoom, FaceTime, and other video conferencing software, and at the height of the pandemic, the PBS NewsHour broadcast daily from the homes of Judy Woodruff and its other correspondents and guests (all of whom had impressively curated bookshelves situated directly behind or to the side of them for all to see).
Rental rates for office space vary widely by locality but wherever the space is located, rent is a large component of every business’s overhead. Since employees of many businesses have successfully worked remotely, the question of the day is, why rent expensive office space?
There is no “one size fits all” answer. Working from home has both advantages and disadvantages for management and staff. On the positive side, commuting costs have been reduced or completely eliminated. On the other hand, working from home has significant distractions, particularly if there are pre-school aged children and pets at home.
Operating costs are always a concern for management and a lower overhead arising from a reduction (or elimination) of rent allows a business to contend with an economic slowdown more adroitly? Aside from the daily change of scenery one enjoys working away from home, virtual conferences are also a poor substitute for the camaraderie of the workplace. For some, the ability to walk down the hall to discuss a question with a colleague is important, while for others the coffee room and restaurant lunches can be one of the highlights of the workday. Cloud computing can eliminate the need to have an in-house server, and central telephone systems can be set up to be transparently operated without a switchboard; however, the same cannot be said for photocopiers, postage machines, safes, a central source of supplies, and all of the other accoutrements which are the white noise of offices that no one pays attention to until something is needed.
Some businesses have chosen to downsize to a few offices, a conference area, and a “work room,” and expect employees to come to the office on a regular but not daily basis. Using a scheduling calendar, individual offices can be shared by multiple employees working in the office space on different days. Called “Office Hoteling” or “hot desking,” one need only Google “Office Hoteling” to find scheduling and floorplan software and there are design consultants that specialize in these arrangements. There are also companies that offer shared office spaces with all of the benefits of a physical space on flexible terms and schedules.
Landlords have long offered incentives such as in-house exercise rooms, gyms and shower facilities available at no charge to all tenants, but many landlords are now adapting extending these incentives; for example by converting unused office space into state of the art conference facilities available for all tenants with amenities such as complimentary beverages. So clearly, the answer for each company depends on the nature of its business, its needs, its ethos, and the emphasis it places on the need for staff to be present in the office.
Before closing, I am going to take a page from Sam Sifton’s food blog in the Cooking Section of the New York Times. In addition to great recipes, Sifton usually ends his blog on a subject far removed from food. It may be a recommendation for a tv show worth binging, a movie, a book, an art show or whatever has piqued his interest. Even if you’re not a foodie, his blog is always worth reading. (Yes, you must subscribe, but not to the entire newspaper, just the Cooking Section (subscribe today), but the cost is only $1.25/week or $40/year.) On Monday, he passed along a recommendation from Patrick Nathan (a writer at Dirt, which is a daily email about entertainment), “Unusual Videos” on You Tube, with his own “You won’t be sorry to click” review, and also recommended the novels of Ace Atkins with a “They’re probably not for everyone, but they’re dark and rowdy, anyway, and do pass the time” review.
My own recommendation for binge watching this weekend is Unforgotten on PBS Masterpiece Mystery. It’s a British police procedural that grabbed me from the opening moments of the first episode of Season 1 (there are now four seasons). I love the theme song as well (but my wife hates it).
This blog was written by Fred Press, a Member of Press, Dozier & Hamelburg. Fred practices in the areas of commercial real estate and business law. Press, Dozier & Hamelburg is a law firm which partners with businesses to achieve their goals, and represents families and individuals, often when they are most vulnerable. Our attorneys deliver valuable insight and counsel in the areas of business, employment law, litigation, commercial real estate, estate planning and administration, and business succession planning. We provide all of our clients with personal service, emphasizing responsiveness, sensitivity, and respect. We are located in Bethesda and serve Maryland, Virginia, and Washington, D.C.
Note: The content in this Blog is for informational purposes only and should not be acted upon without first consulting legal counsel. It is not intended to constitute legal advice.