It is no secret that the office market has taken a hit over the past 15 months. If you are like me, you are one of the few who have been back to the office for some time and have seen a very different downtown and office environment. Almost like a post-apocalyptic setting from a movie.
Our office is located on the Chicago River in the Chicago Loop and situated between both Ogilvie Train station and Union Station. Our view is facing west, and I have always looked out the window to see floods of people making their way to and from the train stations. Hundreds of people trying to get to work on time, or to catch a train home. When we came back to the office in July 2020, I could count the number of people I saw making this same trek on one hand, and that was all day. A very eerie scene to say the least.
I keep my eye on many real estate publications and have been following the Chicago downtown market trends since last July. I have found a few things encouraging. Each month I dig back into publications, or stumble upon a LinkedIn post from my connections in the office brokerage space, and I see vacancy rates falling, and companies pushing to get their employees back to the office. I also find it encouraging that more and more people are spilling into the streets throughout the day. My parking garage is now getting full and the dark windows of restaurants and bars in the loop are turning back to light.
Don’t get me wrong, I do believe we will forever see a shift in the office culture with a mix of work from home and work from the office. I believe we will see offices with smaller footprints and more amenities which will help encourage some employees to come back to the office. We are already seeing sub-leases like we have never seen before. Large companies that have multiple floors are downsizing and condensing their space. I think this is a trend we will see over the next 2 years as companies try to figure out the right mix.
In any event, I think we are making strides in the right direction. There is something to be said about being back in the office, gathering with coworkers, collaborating in person, and seeing people face to face. Zoom has been great, but there is no substitute for face to face, at least in my opinion. I also believe the mix of a couple of days from home and some flexibility for employees is a great thing for a company’s culture.
I would love to hear what you think. How long until we are back to record low vacancy rates? What do you think the future of the office market holds?
by Chris Jones