Corona Virus Aftermath

[Mike Monaco]

The Corona Virus is forcing many to work remotely for jobs that never had the opportunity to do so in the past. Once this Pandemic comes to an end how is this going to impact the real estate market if most jobs continue the remote option. Will renters then move away from the city (due to no longer needing to commute) causing a bigger supply of rentals in areas near cities? Will colleges offer a full remote option causing a decrease in the off-campus housing? 

[Nathan Gesner]

I don't think it will be a significant increase, but a lot of employers are definitely thinking this way.

If my employee can work from home for a month, why am I paying for office space and a desk and utilities and a break room and a parking lot??? In fact, why am I paying $50,000 plus medical and retirement benefits for Joe when I can hire a virtual assistant from Mexico or the Philippines for 1/3 the cost that is just as qualified and speaks excellent English? 

Let me give you one anecdotal example. Property Manager in Texas has a 6,000 sq.ft. building that costs $12,000 a month. The majority of his employees work by email or phone and don't interact with the public. He made everyone work from home and quickly realized productivity remained stable, so why is he spending $144,000 a year to house employees that could do the same job remotely? His next question will be, why am I paying $50,000 a year for someone to work from home when a worker from another country could do the same job for 1/3 or 1/4 the price?

I think a lot of offices are going to use this as an opportunity to reduce their office space and work remotely. I have one employee that does nothing but online marketing, answering phone calls, and screening applications, all of which can be done from home and I may just keep here there because it's convenient for her and frees up some space in the office. 

I also expect to see a lot of mom-and-pop, brick-and-mortar stores go out of business permanently. Commercial property will be impacted dramatically with reduced prices and long vacancies.