Winning Commercial Real Estate Sectors in a WFH World
I'm calling it. Enough shoes have dropped. A substantial percentage of office jobs will be work-from-home (WFH) forever.
Obviously this has big implications for commercial real estate and the Seattle area—including new opportunities.
Will office jobs be 30% part-time-home and 20% fully-home in two years? Or 15% and 10%? That's unclear, despite various company announcements and broader statistics about productivity, worker preferences, and employer intentions.
But staying ahead of trends is important (and fun!). So here are some post-COVID predictions affecting real estate:
1. Many singles and couples with WFH jobs will "try cities on" for short periods. If you're 25, or 60, why not check out Seattle for a few months? Likewise we'll get some working sunbirds. Furnished apartments on month-to-month terms will be needed.
2. Working vacations will be common. You can take twice the "days off" if you work half of each day. This will be a boon to hotels, who should provide multiple desks in some rooms.
3. Growth will gravitate toward neighborhoods that people like, with less focus on easy commuting. These can be popular urban districts, small towns outside the metro core, and everything in between.
4. At-home workers will want retail close by, for coffee and lunch especially. Some of this will be driven by a desire to be around other humans (or give the same few humans a break).
5. The Seattle metro will return to strong population growth next year, approaching our 1.5% annual norm. Drivers will include lifestyle, the return of international immigration, and tech. As usual, 20-somethings will be an outsized percentage of the inflow. This will keep the multifamily sector active.
6. Co-working services will do well, driven by a desire to separate work from home, and companies downsizing or decentralizing their footprints.
What about the overall office market, you ask (we all ask)? Will tech growth, population growth, and wider spacing cancel out the WFH shift? More specifically, will we start a lot of office buildings in 2023 and 2024? I'm not brave enough to guess quiiiite yet. It depends on that 30/20 vs. 15/10 question, and more shoes dropping!