During the pandemic, as board meetings quickly moved from conference rooms to Zoom Rooms, all the talk in the media and around the new virtual watercooler was the future of working remotely. After all, after a year of just rolling out of bed instead of rolling into the parking garage, why wouldn’t workers want to continue working from home? And more importantly, why wouldn’t employers want to save money on the costly overhead of an old-fashioned brick and mortar headquarters?
But while “The Death of the Office” is a nice headline for op-eds on social media, the facts on the ground indicate differently. For St. Louis-area companies, large and small, the buying and leasing of office space is not dead. In fact, it’s alive and well.
For instance, just since the COVID-19 lockdowns began a year ago, Hilliker Corporation agents continued to represent landlords and tenants in leasing a total of more than 200,000 square feet of office space. This includes deals involving marquis companies like:
- St. Louis Bank—Hilliker represented both landlord and tenant (Ladue)
- Stifel Mortgage—Tenant
- Lathrop GPM—Tenant (Clayton)
- Margulis Gelfand—Tenant (Clayton)
- Schultz & Myers – Landlord (Ladue)
- BJC—Landlord (CBD)
- College of Health Careers—Both landlord and tenant (Fenton)
- Fresenius—Landlord (The Grove)
- Equal Housing—Both landlord and tenant (The Grove)
There’s no question that many of our clients have put office expansion plans on hold or shortened their proposed lease terms to weather these uncertain economic times, but overall, we are seeing businesses take a bullish approach toward securing office space.
Part of the reason behind this is because savvy investors want to take advantage of historically low interest rates and lower prices. Some see additional revenue streams in renting out to other companies. Many founders, presidents, and CEOs also see the economic advantage of controlling and expanding their own expenses and workspace rather than be beholden to the rents and restrictions of a landlord.
But this is also an investment in the future of physical office space. Because as novel and convenient as the work-from-home situation can be, many employers and employees alike are finding that it’s just no replacement for an office. According to Ginger, a mental healthcare company, nearly 70 percent of workers polled reported that employees at their company have been less productive during the pandemic. Furthermore, employees feel less connected to their co-workers and key team functions like collaboration, brainstorming, and onboarding of new employees have suffered as well.
In the near future, owners also see the immediate benefit of controlling their own space for their employees, moving out of crowded office buildings into more spacious environs where they can accommodate updated safety procedures and social distancing as workers return. There is also some interest in a so-called “third office” concept that involves maintaining a central office while adding smaller suburban satellite offices that are closer to employees’ homes.
As spring and summer set in and more and more people are vaccinated, the pandemic lockdown is already starting to lift. Companies are eager to have their employees under one roof again—and many workers are excited to get back to the breakroom. There’s plenty of reason to believe that office space in and around St. Louis will continue to thrive. If you think your company might benefit, call your favorite Hilliker agent for an assessment of your needs and opportunities today.