NEW YORK — After 46 years, Steve Leplin has decided to give up his office space.
Mr. Leplin, who owns a law firm and operates as an alternative lender in Denver, is adapting to the changing preferences of customers who want to do business online or in less professional environments like coffee shops.
“I'm 76 years old, and I grew up living in the actual physical space of an office, but I truly believe that the 'kids' are right about avoiding offices,” he said.
The pandemic has had a transformative impact on the office space landscape. Many companies are moving away from traditional spaces to hybrid work and more flexible collaboration spaces.
About 23% of office space in the U.S. is available, compared with 16% before the pandemic, according to global real estate advisor Avison Young.
While big companies' real estate decisions are in the spotlight, small business owners are also reevaluating what they need in their offices. Some find better value for money in suburban locations. Some companies are reducing their square footage, while others, like Leplin, are considering going permanently remote. Experts say it's time to reassess what small businesses actually need.
“(The drop in demand for commercial real estate) has created an opportunity for you to consider making some changes to your space, whether it's newer or in a slightly nicer location,” said the national director of office and industrial. said one Alan Pontius. A division of commercial real estate brokerage firm Marcus & Millichap. “And with changes in rental rates, you might be able to get it for the same or better rate than you were previously paying. So it opens up the opportunity to consider new options.” It will be.”
That also applies to Hunter Garnet. When I launched my law firm in December 2021 during the pandemic, I thought it was important to set up shop near the courthouse, so I signed a lease for 2,000 square feet of office space in downtown Huntsville, Alabama. .
Garnett quickly realized that court appearances via Zoom would continue. Before the pandemic, when he worked for another law firm, he was in court two or three times a week, but now he's going to court every other week.
“I thought I would be going to the courthouse a lot and would grow quickly and need more space,” he said. “We then grew rapidly, but quickly realized it was more economical to hire remote workers, so our need for physical space didn’t grow as quickly as we had anticipated.” It was.”
Garnett is looking for a small space, about 1,200 square feet, in the Huntsville suburbs, close to where most of her clients live. He plans to pay $1.50 per foot for rent, including parking, which is $1 less than he currently pays.
Leslie Saul has also cherished the central Cambridge, Mass., location of her 31-year-old architecture and interior design firm since 2000. But when her landlord doubled her $3,000-a-month rent, she considered other options, including the suburbs. town. Although the pandemic has allowed her to work in a smaller space, she still felt there was value in having an office space with a physical library.
“We wanted to have an identity,” she said. “We wanted to stand out.”
So on January 1, she opened a new office in Winchester Centre, a small town outside Cambridge. The new space will be smaller and include parking, which will result in lower rents. Saul was able to downsize the library, which was filled with samples and a needed portion of the company's office space, she said.
“I think this time I was definitely open to a lot of options that I might not have considered pre-pandemic,” she said.
For companies that no longer have employees in the office full-time and are hiring remote staff, two trends spurred by the pandemic, coworking spaces may fit the bill.
Annie Scranton, owner of Pace Public Relations in Manhattan, is considering a co-working space that can accommodate eight people. None of her staff of 20 are in her current office full-time anymore – some live and work outside of New York – but she does have a few employees on hand, at least on some days. I would like to have a space where people can come.
“Most staff come to the office when we have face-to-face meetings with clients or events they are attending, in which case it is easier to work from the office. It's also easier to work when I have in-person appointments like brainstorming sessions,'' she said.
Some business owners are deciding to give up their office space all together. Leplin said he meets with customers at coffee shops and via video chat. He finds holding these meetings faster and easier than visiting an office.
“We could organize a meeting in the afternoon, but it could take us a week or two to find a date that would allow us to drive 45 minutes to the office, have an hour appointment, and then drive 45 minutes back. “Where did that come from?” he said. “So it's just amazing. There's day and night.”
Leplin plans to break it before the lease expires in three months. It's not just him. He noticed that all floors of his 11-story office building were vacant.
Muffetta Krueger's cleaning and domestic staffing business grew rapidly during the pandemic, and she realized she could grow in some areas without needing more office space. She has two physical offices in Larchmont, New York and Greenwood, New Jersey.
She had planned to find office space to expand in Maryland, near the Washington, D.C., metropolitan area, but decided she could manage her operations there remotely, at least initially. Rather than having candidates come into the office, the company now sends applications online and conducts video interviews.
“If we can operate and keep costs low, we don't have to take on the burden of real estate,” Krueger said.
Copyright 2024 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
