In recent years, remote working has become a central topic of discussion with many praising the benefits of flexibility and work-life balance, others raising concerns about productivity and efficiency.
And then, behind the debate and "popular" concerns there is an economic reality that many prefer to ignore. The real estate market, especially that of offices, is going through a crisis that is probably unprecedented in history. In Europe it is a storm, in the USA a real hurricane. And the implications of this situation go far beyond the simple question of "where do we work".
The illusion of productivity
Many of us have had office work experiences that challenge the traditional notion of "productivity." Memories of long lunches, extended coffee breaks and hallway chats are common ground in the imagination. Yet the dominant narrative seems to suggest that the office is the hallowed place of productivity. It's really like this?
Over the years, I've had the opportunity to closely observe the work habits of many people, from young interns to corporate executives. And the truth is, productivity is by no means unique to the office environment. There are several activities carried out on site that do not add real value to the company, they are only the result of an obsolete corporate culture.
The remote work revolution
With the advent of the pandemic, the world has seen a rapid transition to remote work. Companies that were once reluctant to adopt flexible working patterns have found themselves having to do so in order to survive. And the results were amazing. Many companies have recorded productivity levels comparable, if not higher, to those pre-pandemic.
Recent years have also brought almost eschatological reflections on the need not to remain locked in the gears of the "home - commute - work - commute - home" cycle. Everyone wants to better dose the time of their life, with an approach that has been defined in several cases YOLO (an acronym that stands for "YOu Live Once", more or less "You only live once").
But then, why is there still resistance?
The answer to this question can be found by looking at the real estate market. Empty offices are the tangible symbol of a sector in crisis. I'm talking trillions of euros disbursed in commercial real estate loans. I'm talking about the perfect storm. The growing adoption of remote working has reduced the demand for office space, leading to oversupply in the market.
Some cities around the world are trying to reinvent themselves, converting commercial buildings into residential or restaurant space, but the process is expensive and not always feasible. The reality is that many of these buildings could stand empty for years to come.
And as commercial real estate values fall, cities' finances are also at risk. Tax revenues from these buildings represent a significant portion of many cities' budgets. As property values fall, these revenues are declining, putting further pressure on city budgets.
The future of remote work and real estate
Interest groups that want to safeguard assets and real estate assets (and related media outlets) try to protect their interests by pushing for a return to office, the reality is that the world of work is changing. The growing adoption of technologies such as artificial intelligence and automation is reshaping the work landscape. And with it, our concept of "workplace".
Remote work is here to stay, and the companies that adapt to this new reality by balancing presence and distance in the right way will be the ones that will thrive in the future. Point. To do so, we need to break down the traditional narrative and recognize the real challenges before us.
Beyond the apocalypse told
The real estate crisis we are facing is undoubtedly a significant challenge. However, it also offers an opportunity. An opportunity to rethink the way we work and live. To rethink our own cities, convert them into more livable places and not into rides enslaved to a world of eternal commuters.
After all, every crisis brings with it the opportunity for innovation and growth. And this opportunity is something that yes, it requires our presence.