Many companies have extended their work-from-home policies through 2020 and beyond, which has led some to speculate that the days of the physical office space could be numbered.
Then Amazon on Monday announced that it plans to add 900,000 square feet of new office space in six cities, including a takeover of the former Lord & Taylor flagship department store in Manhattan.
As the second-largest employer in the U.S, Amazon's move arguably marks a turning point in how companies imagine a post-COVID future, but it's also not the only employer that has held out hope amid the pandemic for a return to the office.
"What we're seeing is that while everyone is talking about working from home, we don't think it's going to be nearly what we thought it was four, five months ago," Ryan Harding, executive managing director in Newmark Knight Frank’s Los Angeles office, told Cheddar
Tracking his own deals over the last six months, Harding said no companies have downsized in the wake of coronavirus. Instead, they've renewed, relocated, or even expanded.
Out of 19 transactions since March, he said, roughly a third of companies are expanding. The average deal size in Los Angeles also tripled from roughly 5,000 to 11,500 square feet, suggesting that companies are seeking out larger, more flexible space.
That doesn't mean downsizing won't happen in the near future, Harding said, but for now, companies are waiting it out. This is a far cry from the sense of impending doom that hung over the commercial real estate industry early in the pandemic.
"At one point, someone told us commercial real estate brokers might not have a job next year," Harding said. "Now we're looking at decreases of maybe 10-15 percent, but we haven't even seen that yet."
Outside of downtown L.A., similar trends are coming to light.
A survey of Midwest companies by real estate services firm JLL found that just 1 percent were considering going fully remote, and most had either already reopened, never closed, or were committed to returning to the office between August and January.
The survey also found that just 19 percent planned to incur capital costs to upgrade or expand their office space due to COVID-19.
While many companies are waiting to see how the pandemic plays out before making any major decisions, those that are making investments in their offices are doing so with a new set of priorities.
In general, that means more space, sunlight, air, and accessibility.
"I think this is just accelerating a trend that was happening pre-COVID," Jennifer Frisk, a senior managing director at Knight Newmark Frank. "There are a lot of surveys that state that the number one amenity for employees is sunlight and fresh air."
There is also a desire for more flexibility, she added. While everyone might not want to commit to working remotely full-time, having the option is a plus.
"It's been proven that people do want some sort of flexibility in their workplace, whether that's at-home part of the time or the ability to go back and forth," Frisk said. "What we believe is that the office will be used for all those things that we've realized we can't get at home over the last five months."
In other words, the office will serve as a gathering place for employees who want to collaborate directly or take advantage of specific resources provided by the company. Office space, Frisk added, will have to change to accommodate this.
"There is a good chance that not everyone will be going into the office all day, every day, but when we do go there we're going to get the most out of it," Frisk said.