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Tuesday, December 5, 2023
Dec. 5, 2023

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In Our View: Office space market signals promising future

The Columbian

Three years into the COVID-19 pandemic, economists, demographers and sociologists have yet to reach a consensus on how it will transform American cities. But a recent article from The Columbian provides encouraging signs for the future of Vancouver.

Experts say the local market for office space remains fairly strong, especially in contrast to other downtown areas throughout the country. “Deals are being made and clients are not getting skittish about signing five-year-plus lease agreements,” writes reporter Sarah Wolf.

In Portland, on the other hand, leasing activity dropped more than 40 percent in the first quarter of this year, according to Kidder Matthews, a commercial real estate firm. Available office space reached a record 17.1 million square feet, and sales were at a 10-year low.

In that regard, Portland is not alone. As economists from Harvard University and the Massachusetts Institute of Technology recently wrote in an opinion piece for the New York Times, New York’s vacant office space could fill the Empire State Building 26.6 times.

“To create a city vibrant enough to compete with the convenience of the internet, we need to end the era of single-use zoning and create mixed-use, mixed-income neighborhoods that bring libraries, offices, movie theaters, grocery stores, schools, parks, restaurants and bars closer together,” wrote Edward L. Glaeser and Carlo Ratti. “We must reconfigure the city into an experience worth leaving the house for. Streets once filled by commuting crowds can be reinvigorated by those who really want to be there.”

American cities already were undergoing a transformation; COVID expedited the process. With more workers continuing to opt for remote work or a hybrid schedule, questions remain about the future of downtown business hubs.

If workers do not return to central offices, will companies require less office space? Will vast offices be converted to residential spaces? How will cities adjust zoning regulations to meet a new reality? If fewer workers are spending their day downtown, how will the restaurant industry adapt? How will transit be impacted, especially in major cities with centralized business districts and broad transit systems?

Meanwhile, there are questions for companies trying to assess their future office needs. This is particularly pertinent when most industries are having difficulty attracting and retaining an adequate number of workers.

As Harvard Business Review noted last year: “The office of the future must be more inviting. Tightly packed cubicles are out. Spacious, lounge-style, open seating plans are in. So are meeting rooms that accommodate a mix of in-person and remote participants. Sound-proofed cubicles to handle Zoom and Skype calls and the like are also on the rise.”

All of that plays a role as companies large and small plan for their future — and anticipated growth.

In one example reported by The Columbian, local software company ZoomInfo, which has an office in downtown Vancouver, is planning to anchor a large office building under construction at The Waterfront Vancouver. The company now is requiring U.S. employees who live within 30 miles of an office to be in the office three days a week.

Vancouver’s downtown was on an upward swing when COVID arrived, with multiple developments adding residential, retail and office space. That synergy has helped the city weather the pandemic.

And it has helped create a promising future for the region.

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