According to new data from JLL, leasing in the U.S. fell by 53.4% in the second quarter of 2020 after many states enforced shelter-in-place orders and other policies encouraging people to stay home. Additionally, it was found that office leases in the U.S. dropped 15% in the first five months of the year likely due to tenants looking to walk away from their leases. Moving forward, some experts believe that this drop will continue.
Marc Landis, managing partner at Phillips Nizer LLP, says there are two theories about how the pandemic will transform the office industry: that occupiers will seek more space to accommodate physical distancing or continue to allow employees to work remotely and cut down on space.
“I believe the second theory has gone a lot further than the first theory at the moment,” said Landis. “That is a function not only of employer considerations — feeling they need less space and would like to spend less when times are tough — but also the employees who prefer operating remotely more often than not. There are people who have cabin fever or would like to be able to function without kids underfoot, but a lot of people are functioning well.”
In fact, a survey of U.S. workers revealed that many of them prefer remote working arrangements and that they are able to focus more on their health without hindering their productivity.
Landis added that in his recent dealings with clients, many of them were mostly focused on what leases they should cancel, rather than inquiring about new ones.