Will coronavirus make the office obsolete? - Press Herald

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The 85 Portland-based employees of architect and engineer firm SMRT are moving to a new office at 75 Washington Ave. that has only 14 parking spaces for them. Of course, they’re not actually at their new desks now. They’re working from home, as are most office workers during the coronavirus pandemic.

But rather than presenting a challenge for SMRT, the past two months have highlighted a solution. Productivity has been so high that managers expect a large percentage of the staff will continue to work remotely, at least part of the week, long after the outbreak subsides.

“This is the greatest experiment we never thought we would have,” said Ellen Belknap, the firm’s president.

Many working remotely in Maine are enjoying their time at home, and some employers say staff are more engaged and productive. But some real estate experts say it’s much too early to predict the pandemic’s long-term impact on traditional office work.

Remote work, sometimes called telecommuting or work-from-home, was a growing part of the American labor force prior to the pandemic, but most surveys put it below 4 percent in 2019. Then early this spring, literally overnight in some cases, businesses closed their offices and sent most workers home. With no real planning, a great experiment was underway.

The past two months have introduced home office workers to Zoom fatigue and the stress of juggling both work tasks and housebound youngsters. But it also has offered the liberation of car- and traffic-free days, savings in commuting time and money, and a newfound flexibility around work.

Office work is a broad category. At least 92,000 Mainers have office and administrative jobs, and a similar number work in business and finance, management or legal sectors that put them at a desk, according to recent U.S. Bureau of Labor Statistics data. Those figures account for about one in every four Maine workers.

Clearly, office functions and commerce can go on in Maine in some form without tens of thousands of workers driving to and from their desks, five days a week. By early May, for instance, the state of Maine had 87 percent of its 9,293 nonpublic-safety personnel working remotely, according to the Maine Department of Administrative and Financial Services.

Telecommuting also can have a large, immediate impact on the environment. Cars and trucks spew roughly half the greenhouse gas emissions in Maine, so working from home could become one of the most cost-effective ways to fight climate change.

“This is the greatest experiment we never thought we would have,” says Ellen Belknap, president of SMRT. Derek Davis/Staff Photographer

But does this crisis-induced pivot signal a paradigm shift away from traditional office space? Commercial real estate experts in Portland say the answer won’t be known until there’s a vaccine for the virus and the fear of contagion subsides. But don’t count out the office, they said.

“I personally predict that with everyone working at home, there will be a huge pent-up demand to go back to work,” said David Soley, a shareholder at the Bernstein Shur law firm and partner in commercial real estate firm East Brown Cow Management. “Humans are social animals.”

Downtown office space in Portland remains in high demand even now, Soley said, because many companies have a culture in which collaboration and teamwork are necessary and best done in person.

“This is not the end of offices,” he said.

NO RUSH TO RETURN

At Portland-based payment processing technology firm Wex Inc., one of the larger employers in southern Maine, there are no immediate plans to call the company’s mostly remote-working staff back to the office.

No changes are expected in the near future, said company spokesman Rob Gould, and because most Wex workers are able to do their jobs remotely, the company isn’t in a rush to return them to their offices.

But at the same time, Wex is staying on track with plans to build a new, $50 million operations center at The Downs in Scarborough that would accommodate as many as 1,200 workers in various call center, service center and other operational roles.

Gould said the company currently is surveying its employees about working at home and won’t have a clear picture of its future plans for at least another month.

Other large employers also are staying the course, but with an awareness that work-from-home is giving them new options.

Canadian financial services firm Sun Life Financial has roughly 500 workers in Greater Portland, and it plans to keep them home for the time being.

“We are also encouraging more flexibility,” said company spokeswoman Devon Portney Fernald. “Our senior leaders issued a flexibility pledge, promising fewer meetings and avoiding lunchtime and after hours.”

Sun Life has signed a lease for 77,000 square feet in a yet-to-be-built office building in the Portland Foreside waterfront development. It’s not scheduled to open until 2023.

“We don’t know how the situation will play out, especially in that long term,” Fernald said, “but for now the plan is still going forward.”

Fast-growing Tyler Technologies has 940 workers, in Yarmouth, Falmouth and Bangor. It did a major expansion in Yarmouth in 2018 and is currently updating its Falmouth offices. Asked if remote work might tamp down the need for more expansion, a company spokesperson said planned growth eventually will require more space.

“Telecommuting is now a proven bridge in the short and near term, as we execute facilities expansion in the future,” said Tyler spokeswoman Jennifer Kepler.

UNEXPECTED BENEFITS

A survey helped convince Dottie Chalmers Cutter that telecommuting is going to be a key post-coronavirus option at Chalmers Insurance Group.

Cutter, vice president of operations at the family-owned, fourth-generation insurance company, does a twice-yearly survey of her 90 employees in Maine and New Hampshire. The latest one, completed after most people were working from home, surprised her.

“We’re finding now that our motivation is through the roof,” she said, with 85 percent of workers indicating they felt motivated or highly motivated to do their jobs.

Teamwork scores also were very high, bolstered by Monday morning “coffee and conversation” sessions via teleconferencing service Zoom and weekly online “huddles” for each of the eight offices.

Those and other ways of staying connected have convinced Cutter to give her workers the option of not returning to their offices after June 30. She has stopped buying desktop workstations in favor of laptops, to make sure everyone at least has the tools to work from home.

Robin Carlson, personal lines account manager at Chalmers, simply moved her two desktop monitors, keyboard and office phone from her Bridgton office to a corner of her kitchen in South Casco.

At first, she was worried about being distracted working from home. But Carlson said she now feels more productive without people walking into her cubicle.

Kate Everett, director of operations for SMRT, works from her home office in Kennebunk, using a good office chair and large computer monitor. Everett also positioned the monitor to take advantage of window light for video conferences she joins. Gregory Rec/Staff Photographer

“The key thing about working at home is that I keep my exact schedule,” she said. “That structure is key for me.”

Asked what she misses about the office, Carlson said her co-workers and the ability to go into town. The best of both worlds, she said, would be commuting to the office part of the week.

A few days at home and a couple in the office would be a good mix for Kate Everett, operations director at SMRT. Until mid-March, she was commuting an hour a day round-trip to Portland from Kennebunk, mostly ride-sharing with a co-worker.

Everett was able to turn a former kids’ room into an office. Everyone at SMRT already had laptops, so she had the ability to work from home. But for long-term comfort and productivity, Everett also grabbed a 27-inch monitor from work and got a real office chair.

“Gone are the days when you’re only working if you’re at your desk,” she said.

Balancing these new worker preferences while retaining productivity and workplace culture will be a new challenge for companies transitioning to telework.

At Chalmers, walk-in traffic will remain important. So will staying active in the local business communities where its offices are located, and that will mean keeping a physical presence.

“But we may not need all the real estate we have,” Cutter said. “If we look at downsizing, what will that look like?”

For SMRT, a smaller footprint was meant to send a signal to clients and to its workforce.

“As architects and engineers, it’s our job to move the needle on climate change,” Belknap said.

Remote work was always going to be part of the strategy for SMRT, Belknap said. The company has four offices and a total of 130 employees who often need to share information. Architects in different offices, for instance, can see three-dimensional models of a building while referring to a document on another screen.

But the pandemic has led to new ways of using technology. For work, a person can live-stream something at a job site that an engineer, working from home, can review. And to maintain the workplace culture, virtual happy hours are a way to stay connected and socialize during the pandemic. Recently, Belknap and Everett scheduled a virtual lunch with a new employee.

Remote work was always going to be part of the strategy for SMRT, says the president Ellen Belknap. Derek Davis/Staff Photographer

“We are fully geared up to work remotely, and we will be doing more of it,” Belknap said. “We’ve proved we can be highly productive.”

DOWN BUT NOT OUT

Soley, the lawyer and real estate investor, said that in the short term, commercial landlords and business owners he speaks with are trying to figure out how to navigate health guidelines in ways that will let them slowly bring workers back to the office.

East Brown Cow Management has a portfolio of commercial office space in Greater Portland. Landlords are trying to determine how many people at a time can use an elevator, and how to keep building surfaces sanitized, Soley said. For offices with low cubicles and common meeting spaces, the challenge is how to create physical distance, perhaps by bringing workers back in shifts.

That’s especially true in offices that have embraced collaborative areas and flex spaces, at which workers share space and equipment as needed, and offices with long tables where workers sit close together.

Companies still see offices in downtown areas as having the energy and amenities, such as restaurants and shops, that attract the workers they want and need, said Craig Young, a partner at Portland commercial real estate brokerage The Boulos Company. Those attractions may be shuttered or restricted today, he said, but companies signing leases are looking past the crisis.

One wild card, Young acknowledged, is whether the country enters a deep recession. Business failures and long-term layoffs would change expectations about office occupancy. But it would be unlike the Great Recession a decade ago, he said, because the driver would be a health risk, not an economic fundamental such as unsustainable mortgage debt.

One window into the future of the worksite office is the annual Greater Portland Market Outlook done by Boulos. Prior to the pandemic, top-class office space downtown had a vacancy rate of less than 1 percent, the tightest market since 2001. That hasn’t changed much.

“The downtown, really, is on fire,” Young said.

One example is a modern office building in the Old Port at 300 Fore St. with 55,000 square feet that recently went on the market. The current tenant is downsizing and consolidating in Boston, Young said.

“There’s a ton of interest, even in this (COVID-19) world,” he said.

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