The metro office market in Atlanta has seen trends that adversely affected the city and will likely have a long-term negative impact post-Covid-19.
Among these are how the new social distancing rules will change the placement of employees in an office space. For instance, Colliers International is expecting separation and privacy to become the new norm. Gone are the breakdown of barriers to facilitate company culture. The cubicle, a depressing feature that just a decade ago characterized most work offices, will be returning.
The coronavirus will also effect co-working, which was already struggling before the coronavirus pandemic. For instance, leasing demand from co-working and flexible workspace firms has shrunk in the past few quarters, most evidently seen at the once Wall Street darling, WeWork.
The diminishing footprint of companies like WeWork could be devastating to some places, such as the Interlock in West Midtown, which will no longer have that anchor tenant. Moving forward, companies may be hesitant to return to dense spaces altogether.
As many companies are seeing a decline in revenue, they are approaching the Atlanta office market with a cost-conscious frame of mind. Some companies may choose to have employees work from home and sublease space.
In the months of March, April and May, 634,000 square feet of sublease have been added to the Atlanta office market. The figure is a 20% increase from the beginning of the year. That is a significant drop in revenue for office space companies due to the coronavirus. In Atlanta, Buckhead has the largest amount of sublease space over the three months, while Midtown saw the most significant increase in availabilities.
Another trend to expect is that telecommuting has now become the norm. Colliers International Occupier Services Group found that four out of five employees would want to work remotely one or more days a week. The results of the global survey are supported by companies that found productivity has not suffered since the coronavirus work from home policies were put into effect. This will shake up the market in the years to come, adding instability and uncertainty.
"The validation, and success, of telecommuting during the pandemic," Colliers stated, "suggests a permanent change to the work environment in Atlanta."
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Michael A. Mora
Michael was born and raised in South Florida. He went to undergrad at Florida Atlantic University and earned his master's degree from the Columbia University Graduate School of Journalism. He is the crypto litigation reporter for Law.com, as well as an editor for ALM Global. You can email him at [email protected].
