As stay-at-home restrictions are beginning to ease up in a few areas around the country, companies are thinking about what their office space will look like when they welcome employees back.
As they’re planning, Ross Forman, managing director of business advisory firm BDO, expects them to have a lot of questions for their landlords.
“Whether you’re a mid-sized company with 1,000 employees or a large company that has thousands of employees spread out across hundreds of locations, there is a tremendous amount of work that has to go into the planning,” Forman says. “They have to make many, many decisions about how they’re going to reintegrate that workforce back into the workplace.”
One of the significant decisions revolves around real estate. While most retailers have probably asked rent help, Forman thinks tenants in other CRE sectors will start asking for relief.
“I don’t think that [asking for rent relief] is prevalent in financial services,” Forman says. “Some of these companies may not survive unless they are part of some multinational corporation or just well-capitalized.”
When these companies approach their landlord, they should have a rent relief concept in mind. “They should be looking at their lease and seeing what the specific provisions are about force majeure,” Forman says. “If they don’t have a force majeure in their lease, it goes to common law. And they should be looking at those terms to understand their legal rights and ask for some sort of relief at a minimum.”
Outside of asking for rent relief, Forman says tenants may just want a general sense of what the landlord is thinking.
“When you start to think about opening up, every tenant must be in contact with every single landlord,” Forman says. “Just because we’re going to be reducing restrictions, doesn’t mean you can start planning some staged returns. You must understand that every location, jurisdiction and state is going to be different.”
Tenants will also have questions about cleaning practices and policies that restrict the number of people in the elevators and even the bathrooms. They will want to know if the landlord is taking each occupant’s temperature as they walk in or if they are putting in any new air filtration systems.
Other tenant questions will probably revolve around the actual layout of their space. “Are we going to reconfigure workstations or have people sitting in every other workstation?,” Forman says. “If you have staggered shifts of people, how long is that going to last? Are people even going to want to come back to the office? And if they don’t, the planning becomes longer-term around when people will want to come back.” At that time, some leases will expire. So Forman says tenants will have questions about what to do next. “The question is do they start entering into some short-term extensions,” Forman says.