NAR report explores future outlook for working from home

This is one of the issues explored in the Commercial Market Insights report published by the National Association of Realtors (NAR) in September. Its examination of remote workers indicates that the demand for commercial real estate is moving toward new norms.

“Where and for how long the trend will hit a new normal will likely continue to take some time as businesses assess the impact on worker productivity and on building a strong office culture,” according to the NAR report. It looks at studies that indicate working from home has both positive and negative effects: some showing increases in productivity, in part the result of commuting time saved, and others showing that workers miss the social company that the workplace provides, and are challenged by certain aspects of working from home (e.g., childcare, unsuitable work spaces). 

“Given the pros and cons of working from home, what could be the new norm is a hybrid model where workers spend a mix of time between working from home and at the office,” says the NAR report. It cites a Gartner, Inc. survey conducted in June of 127 company leaders, which showed that 82 percent of respondents intended to permit remote working some of the time, 47 percent said they intend to allow employees to work remotely full time, and about four in 10 reported they will grant employees flex time.

This aligns with the findings of a working paper published in June by the National Bureau of Economic Research entitled “What Jobs Are Being Done at Home During the COVID-19 Crisis?” Its research suggests that about 40 percent of both large and small firms expect that 40 percent or more of their workers who switched to remote work during the pandemic crisis will continue working remotely post-COVID, with at least 16 percent of American workers conducting business out of their in-home workplaces at least two days a week.

“This would represent a dramatic and persistent shift in workplace norms around remote work and has implications for companies, employees, and policymakers alike,” says the paper.  “An increased ability to work from home would likely influence decisions ranging from where people live to where companies locate, and has the potential to reduce demand for and reshape the nature of commercial real estate. More broadly, the shift to remote work caused by COVID is testing the industry’s ability to adapt, and is likely to have implications for the nature of work in the years to come.”

Cushman & Wakefield, AMO®, echoes this in suggesting that the new normal will be a “total workplace ecosystem” where work is done in a variety of locations and in which the office remains, but with a new purpose: “to provide inspiring destinations that strengthen culture connection, learning, bonding with customers and colleagues, and foster creativity and innovation.”

In addition to exploring the remote workforce, the NAR Commercial Market Insights September report also addresses market activity in the office, industrial, and apartment sectors, and takes a look at food delivery service and its impact on retail real estate. It notes a surge in food delivery service and suggests that “the coronavirus pandemic may not be a temporary demand peak, but more like a permanent catalyst as it boosts the shift towards ordering food online.”