KBS: "Office Buildings Are Not Going Away"

There are a lot of questions and uncertainties about the future of the office market, but major office owner KBS has a simple answer: office buildings are not going away. The investor says that there will always be demand for office space, but with the rollout of the vaccine and an end in sight for the pandemic, it is bullish on office activity this year.

“Office buildings are not going away any time soon,” Giovanni Cordoves, Western regional president, tells GlobeSt.com. “As long as workers have a need for community and employers strive for ingenuity and collaboration, there will be a demand for office space. Additionally, as the COVID-19 vaccine becomes more widely available and people feel safe and comfortable, well-amenitized office properties will once again be in high demand.”

In Dallas, where KBS has a significant portfolio, early re-entry into the office space has been a good indicator of demand and the recovery of the office market. “As Dallas companies come back to the workplace, they will spur other companies to do the same, which will quickly foster the sense of returning to normal that we all crave,” Brett Merz, SVP and asset manager for the state of Texas for KBS, tells GlobeSt.com. “We see great potential in the Dallas market as a thriving business hub that is poised for future growth once we have weathered the storm and the pandemic is behind us.”

In addition, employees are also experiencing what Cordoves calls work-from-home fatigue, which is helping to support a swift re-entry into traditional offices. “There is evidence that many employees are increasingly experiencing “work from home fatigue” and wish to return to the office as soon as it is safe to do so,” he says. “In fact, a recent Gensler survey reveals that most of the workforce misses the camaraderie and opportunity for spontaneous collaboration that the workplace offers.”

As a result, Merz expects a rapid and full recovery of the local Dallas office market. “The Dallas market and state of Texas as a whole were well positioned to thrive pre-COVID, and the qualities that drove such successes remain present—we believe 2021 will be a continuation of that success story,” he says.

Outside of Dallas, Cordoves expects a similar recovery for office. “This bodes well for the office sector as a whole,” he says. “When given the choice, many people like having a central hub for doing work, and offices that offer amenities that add to employees’ comfort and convenience, as well as boost productivity, will be ahead once a broad return to the workplace occurs.”