Will COVID-19 Drive Up Demand for Office Space?

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NEW ORLEANS – The majority of office workers in New Orleans have been working from home since March 22, when Gov. John Bel Edwards issued stay-at-home orders to help decrease the spread of COVID-19. In short time, Zoom calls from the kitchen have replaced gatherings around the conference table as the way work gets done.

Now that the state is making plans to carefully re-open sectors of the economy, Realtors are speculating about whether the experience of the last two months will increase or decrease demand for office space. And there are arguments for both points of view.

“That’s a double edged sword,” said Donna Whalen Little, a tenant representative at Corporate-Realty, Inc. a commercial real estate agency headquartered in the CBD. “I’ve been reading a lot about it and it’s my personal opinion that it could go either way.

“The trend recently has been toward co-working spaces, where the number of people per square foot was maximized as much as possible. There were probably two people in a ten-by-twelve office and people working closely together in common areas. But now it could go the way of more spacing between people when they do come back to their offices, which means more square footage since workers will have to be further apart.”

The flip side, of course, is that companies may have realized that they’re able to get work done with a portion of their staff working remotely.

“My inclination, though, is that people are going to come back to their offices in a big way because they have to be connected,” said Whalen Little. “The business doesn’t feel as effective as it would be if people people could communicate in person with a quick comment down the hall. It’s just different to formalize and schedule all your communications. People aren’t used to that. And there’s a lot to be said for body language and communication – especially when you’re negotiating.”

In addition, if office buildings wind up housing less people per square foot, they would be functioning according to their original design.

“A lot of the buildings that were built back in 1980s, the air conditioning was designed for one person in 200 square feet,” said Whalen Little. “Recently, you’d find five people in 200 square feet because of open plans. Large employers were putting a lot of people at a desk, very close together and the mechanical systems, electrical systems and air conditioning were not designed for that. It was designed for somebody’s private office. So it has been a burden from an environmental point of view for quite a while. The system’s have had to be retrofitted over years because of a different use of space.”

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