Will The Corporate Footprint Shrink Due To COVID-19?

A CoreNet Global survey reveals corporate real estate professionals' belief that remote work and virtual meetings will last beyond the COVID-19 crisis, and the corporate footprint will likely shrink as a result.

Corporate real estate professionals said the use of remote work and virtual meetings will last beyond the immediate coronavirus (COVID-19) crisis, according to a recent CoreNet Global survey. A growing number also indicated that the overall corporate footprint will likely shrink as a result.

corporate footprint
(Credit: Getty Images/maruco)

CoreNet Global surveyed its 11,000 members to gauge the evolving corporate real estate (CRE) response to the COVID-19 challenge and to identify practical steps members can take to support their companies’ effort to ensure employee safety and business continuity. Separate surveys were sent to end-user members (119 responses) and service provider members (143 responses).

The longer-term adaptation of remote and virtual work was reported in greater numbers:

  • 94 percent of end-users think that expanded use of remote working will last beyond the current crisis (up from 89 percent in a previous survey)
  • 94 percent of end users surveyed think that expanded use of virtual meetings (e.g., vs. face-to-face meetings) will last beyond the current crisis (unchanged from the previous survey)
  • 69 percent of end users surveyed say that their company’s real estate footprint will shrink as a result of increased work from home (up from 51 percent in the previous survey)
  • 70 percent of respondents say that real estate projects have been put on hold (up from 67 percent in the previous survey)

However, these trends are not without challenges, which were identified by the respondents:

  • Being unable to have the kind of collaboration that occurs when everyone is together in the same room
  • Developing a long-term workplace strategy and remote working strategy
  • Figuring out the framework and details of our return-to-office plan
  • Extra time required to manage at a distance, with frequent check-ins to check on the emotional toll
  • Mental health of employees
  • Accessing adequate supplies of hand sanitizer and masks

Optimism Is Growing

Nineteen percent of end-user respondents reported that their companies had experienced layoffs due to COVID-19, nearly double the figure revealed in a previous survey (10 percent). However, corporate real estate professionals are becoming more optimistic.

Survey respondents’ short-term economic outlook is less bullish than their longer-term outlook, but it is more optimistic than it was during the previous survey. When asked “Are you more or less optimistic about the economic future over the next three months?” the average rating (on a 1-5 scale, with 1 = low and 5 = high) was 2.5 for both end users and service providers. In the previous survey, the average rating was 2.3.

When that time frame is expanded to six months, the service provider rating jumped to 3.13 (up from 3.0 in the previous survey), while the end user rating (2.95) remained essentially unchanged from the previous survey (3.0).

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