In recent years, remote working has become a central topic of discussion: many praise the benefits of flexibility and work-life balance, others raise concerns about productivity and efficiency.
And then, behind the debate and "popular" concerns lies an economic reality that many prefer to ignore. The real estate market, in particular the office market, is going through a crisis that is probably unprecedented in history. In Europe it is a thunderstorm, in the USA a real hurricane. And the implications of this situation go far beyond the simple question of “where we work”.
The illusion of productivity
Many of us have had office-based 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 sacred place of productivity. It's really like this?
Over the years, I have had the opportunity to closely observe the work habits of various people, from young interns to corporate executives. And the truth is, productivity is by no means exclusive to the office environment. There are various activities carried out on site that do not add real value to the company, resulting only from an obsolete corporate culture.
The remote work revolution
With the advent of the pandemic, the world witnessed a rapid transition to remote working. Companies that were once reluctant to adopt flexible working models have found themselves having to do so to survive. And the results were surprising. Many companies have seen productivity levels comparable to, if not higher than, pre-pandemic levels.
These last few years have also brought almost eschatological reflections on the need not to remain closed in the gears of the "home - commute - work - commute - home" cycle. Everyone wants to better manage their life time, 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 real estate assets and activities (and related media) try to protect their interests by pushing for a return to the 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 working landscape. And with it, also 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 housing 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 subservient 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 requires our presence.
