The global pandemic caused skyscrapers and office parks to sit empty for months and now as the U.S. recovers, companies are deciding whether or not their workers will return to their headquarters.
Long before the pandemic forced workers to turn their homes into offices, Connia Nelson at Lifeway Christian Resources in Nashville, Tennessee, was already looking around the company's headquarters and questioning if they needed their 277,000 square foot building.
Even pre-pandemic occupancy rates were around 60%.
"More and more people were working remotely," Nelson said.
With most of the company working offsite, Lifeway decided to make a difficult decision. Two weeks ago, they sold their nearly new company headquarters for an estimated $95 million.
They had just moved into the building in 2017.
"We had to ask ourselves, ‘is it worth having a building of this size when you’re not fully utilizing it?’ It’s a great building but does that make sense?" she added.
Businesses of all sizes are trying to figure out what's next as many companies are looking at keeping workers remote either full-time or in a hybrid-type situation. It's left companies looking at balance sheets and wondering if leasing massive office space makes financial sense.
"It's a conversation I think a lot of people are having," Nelson noted.
Commercial real estate experts say it’s still too soon to predict any long-term impacts from all of this, as many large companies are locked into four or five-year leases. That prevents them from making any big moves right now.
Lawrence Yun, the Chief Economist at the National Association of Realtors, says vacancy rates for office buildings is sitting around 20%.
"Companies will hire more people. It’s just unclear if they’ll have dedicated office space," Yun said.
Some parts of the commercial real estate market are booming though. Warehouse space is hard to come by as many companies are having to expand shipping facilities to handle a surge in e-commerce.
"It’s unclear though how much of a fresh demand there will be for office space," he added.