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Is the Hybrid-Remote Office Model Even a Good Idea?
Our post-pandemic working lives could become a ‘meh’ experience, where neither in-office or at-home truly shine
Here’s some good news: After a 13-month span that went from: “This is another seasonal flu, it’ll be over in two weeks” to “July is the new normal for work re-entry!” to “Okay, October 2020 is the build back better date!” to “Hmm, 2021 seems more realistic…” we’re now, finally, seeing enough progress in the rate of vaccinations and an overall reduction in Covid-19 rates that the concept of a “new work normal” actually seems within reach. The exact date will vary by company, industry, and geographic distribution of offices, but after a year of postulating about what exactly a return to work might look like, we’re close enough that we can start chasing the idea more concretely.
What’s out there that seems right and wrong?
The elephant in the room: one sector of commercial real estate
There has been a lot of hand-wringing about the future of commercial real estate since the beginning of Covid, with a recent New York Times deep dive painting a grim picture:
According to Moody’s, the credit rating firm, commercial real estate values are projected to decline by 7.2 percent nationally from their pre-pandemic levels, bottoming out by the end of this year. The hardest-hit categories are the office and retail sectors, with values declining by 12.6 percent for offices and 16.5 percent for retailing.
True, the fate of the physical office space remains uncertain for much of white-collar America, but it’s also important to note that commercial real estate, overall, isn’t necessarily dead in the water — just that the sector has pivoted more from conventional office space (think HQs) to industrial and warehouse spaces, which are common for e-commerce and retail businesses that need more space to store their product inventory. Consider: Industrial property indices actually rose in 2020, by 7.4% year over year.
When you focus on a “hybrid” model, does that mean that neither experience (home and in-office) are inherently…
