Space-planning strategies: COVID-19 will change your commercial space needs

GUEST BLOG

Michael Coretz
Real Estate Advisor,
Commercial Real Estate Group of Tucson

Employees have now spent a few weeks working from home because of COVID-19. Once people are free to congregate again, I predict that how businesses will use Tucson commercial space will never be the same. Here are some ways I believe Tucson commercial space will be used differently.

REMOTE WORKFORCE
I expect that many employees will end up liking teleworking so much they’ll lobby to do it more often if not attempt to eliminate onsite work altogether. Business owners also will take a new look at their Tucson commercial space and wonder if they need it all or could use it better for a remote workforce. I envision that COMMERCIAL REAL ESTATE GROUP OF TUCSON will soon advise owners on new space-planning strategies that will accommodate workers who rarely if ever come into the office.

For instance, space may focus on more communal activities such as rooms for physical meetings, infrastructure dedicated to computer connectivity—including to support virtual meetings—and storage for common supplies and equipment.

Some businesses, such as law offices and mental health providers, and functions like C-suite executives will still need private offices on site. But I can foresee most employees needing physical office space only to meet with clients.

All of this will save business costs by reducing a company’s commercial property footprint. It could also allow a firm to move into more prestigious space that fits the need for less square footage.

ROOM TO BREATHE
On the other end of the spectrum, it’s possible that places where employees have to show up at a central location will get more space. I don’t believe the SARS-CoV2 will disappear and it’s possible there will be future flare-ups of COVID-19. To meet that health challenge, business owners may want to add extra space and physical barriers between employees to lessen coronavirus transmission. Call centers, cubicle configurations and public seating areas may stretch out for health considerations.

FROM RETAIL TO DISTRIBUTION
The number of physical stores already was shrinking because of the popularity of online shopping. Community stay-at-home orders have only hastened the trend. During the COVID-19 disruption, more consumers have learned how to navigate buying, paying for and having delivered all sorts of goods. For some retail stores, a successful survival strategy in the disastrous economy may be to turn their stores into distribution centers instead of going back to onsite sales of goods. This will reduce the amount of retail space they need and limit the number of stores.

The switch to distribution may help businesses that simply will not otherwise be able to withstand three or more months without revenue. The online experience, delivery and curbside pick-up will become priorities. Even businesses who already operate this way will need to improve as this type of operation grows.

GROWING MANUFACTURING
COVID-19 highlighted the flaws of global supply chains. The Tucson commercial space likely will include growth in manufacturing as companies find alternatives to importing goods from China and other countries.

Tucson is in a good position for manufacturing and distribution as a Southwest hub with established direct access to coastal ports and major transportation. Target, Amazon and HomeGoods are just a few companies that have taken advantage of the region’s ready-to-go infrastructure that continues to improve.

TAKE-AWAYS
I think it will be the rare business owner who will go back to business as usual once we’re past the COVID-19 crisis. New efficiencies will be discovered and new infrastructure might already have been installed to run operations better.

Plus, a regrettable result of the coronavirus will be the closure of several businesses that can’t survive the shutdown. The market will see a surplus of second-generation Tucson commercial space, an opportunity for companies that are looking to reposition their operations.

Now would be the time to take a look at your commercial space with an eye for accommodating changes. Consider:

• Could you use less space?
• Would you need more space?
• Can you reconfigure your space to make it more efficient?
• What functions within your leased space can you do without?
• How would operational changes affect parking, security, IT and business hours?

These and other considerations will guide you in finding the right Tucson commercial space after COVID-19. For instance, don’t delay in this examination if your LEASE AGREEMENT RENEWAL COMES UP SOON. You’ll need to know quickly if you need to restructure that agreement to fit your post COVID-19 business needs.

In his 25-plus years as a commercial real estate tenant representative, Michael Coretz has picked up a wealth of information and expertise. He’s passionate about making sure that corporate users, tenants and buyers like you get a fair deal and the best solution for your business’s bottom line. Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia. For more information, call 520-299-3400 or visit www.commercial-real-estate-tucson.com.