Will offices be back in 2022?

When the coronavirus pandemic hit U.S. soil in early 2020, workers across the country have been urged to tidy up their desks and prepare to do their homework for the foreseeable future. We didn’t know at the time that remote working would turn into a setup that lasted almost two years and cashed in.

All of this has taken a heavy toll on office buildings, as well as the people who invest in them. But will things get better in 2022? Looks like the answer is “yes and no”.

More workers should come back

Earlier this year, following COVID-19 vaccines, companies began planning for workers to return to the office. In fact, a number of large employers have made their views clear on remote working: it is a temporary solution, but not a lasting one.

Image source: Getty Images.

But then the delta variant hit, which put those plans to reopen the curbside offices. It was difficult to argue for workers to return to the office at a time when COVID-19 cases were skyrocketing.

And so companies have shifted gears. They pushed back their reopening dates and established policies regarding vaccination mandates. And now they are ready to welcome the workers again.

That, combined with the widespread availability of COVID-19 booster injections, should be enough to generate a decent return on offices in 2022. And that, in turn, should benefit office REITs or real estate investment trusts.

But if investors expect a full-fledged to recover? Not exactly.

Many companies already have plans to keep workers away for the long haul. And now that remote working has been going on for nearly two years, businesses could see more setbacks from employees next year, when plans to return to the office materialize. As such, we should expect more full offices, but not 100% capacity.

Additionally, many companies may still seek to reduce the size of their workspace by accommodating hybrid schedules – configurations in which workers do their work from home but also travel to the office a few days a week. Office building owners may have to brace themselves for an intense round of negotiations as companies scramble to cut corners at a time when office space doesn’t seem as essential as it once was.

it should be a better year

All in all, real estate investors should expect 2022 to be a better year than 2021 on the office building front. But that doesn’t mean the industry won’t face challenges. Among companies that maintain remote working arrangements and allow employees to share their time, desktop REIT investors shouldn’t expect instant payback – it might not happen until 2023, or beyond. .

Additionally, while employees can return to their offices during 2022, that progress can also be slow. Chances are, companies are making it easier for workers to get back to work rather than abruptly ending remote work. And so while the offices should starting to fill up again is certainly not something we can anticipate overnight.

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