Will COVID-19 be the demise of CBD commercial?

I think commercial properties will be around for another century at least. This corona kerfuffle will be over before you know it. All it takes is a reliable treatment, a vaccine or that terd immunity thingamajid.

Anyway, the human psyche revolves around working in a commercial property.

Think about it. The variety of food available in a commercial precinct. Then there's bars, clubs etc to be frequented both during and after work.

What can be more funnier than racing to the club at lunch time, a nice hot meal, a little on the pokies or horses, and finally throwing down a few beers whilst talking with your mates about how much work sucks. You don't get none of that WFH.

And office politics ain't the same WFH. Leering, arguments (especially after the above mentioned lunch) just ain't the same.

Nah, commercials are safe in my book.

 

You could be on to something here

 

it will make Comm'l RE rent more affordable for retailers

 

Id rather leave it vacant then. In this market, cash is strength. As long as you’re sitting on cash you have bargaining power.

 

Not sure what you mean?
Your a developer sitting on commercial real estate no doubt tied to an enormous loan and you would sit on it vacant?
Banks aren’t giving deferments for these properties so I reckon you would be sunk in 6 months.

 

Lol... yea sure. Hilarious

 

Haha something like that. Could probably leave it vacant for 10-15 years and be fine at these interest rates. May have tripled in price again by then, or quadrupled?

 

You would probably have to capitalise any expenses and bear those costs until you redevelop or dispose of the asset.

 

great way to get the economy going. Work and before leaving for the night splash your cash on some new shoes.

 

I know my work will never be returning to full occupation in the office ever again..well so they say. It will probably mean we can cut a floor when the lease is up. If I ever leave the company the question of wfh will be an early question in my interview process. It will be a strong decision on whether it's a company I want to work for.

Nearly all of my friends and associates don't want to return for a 5 day week and have been working perfectly fine from home.

So I think it's going to have an effect. Whether it will "devastate" commercial I don't know, but it will have an impact maybe permanently.

 

CBD commercial has probably been going up in this market to be honest, as global capital floods in to a tiny 1 square kilometer area. If you're looking for liquidity and capital protection doesn't get safer, every recent financial crisis has demonstrated so far. I just had a guy approach me on Sat for 2 of our CBD sites and wants to pay over the top.

Here's another recent transaction. 280sqm, collecting $200k rent or so. Had 12 bidders enter round 1 with bids of $7m+. Sold for $8m. Only a few weeks ago.

41-45 A'Beckett Street, Melbourne VIC 3000 - Sold Shop & Retail Property | Commercial Real Estate

 

Lots of companies were been forced to make WFH work even for those who didn't believe in it prior pandemic. There will still be a large portion that would preferred face to face contact, but there will also be a significant increase in percentage who believe WFH can also work. Imagine 10% decrease in commercial office space usage would impact the market. My guesses are it will be a lot higher %. The company I worked for just ended a lease with one of their offices but there is currently no plan replace it.

 

Sydney records lowest vacancy Rate since 2008 but demand subdued


Up until Covid the Commercial CBD Vacancies we’re low and dropping.
So in my opinion CBDs and working face to face will have many years to go.
I’m in my 30s I like working with people I enjoy my coworkers company I bounce ideas throw balls and so on.

I have a bee friends who work in the city 1 is a The legal profession and likes his Chambers in the city. Same thing as I colleagues, ideas getting away from stagnation of home environment.

look it also depends on your job. An accountant or a book keeper and so on may not need a social environment.


Also having a workplace where you like your workers at work is not a negative issue of bad culture. It’s just a different culture.

Most of our team work from the office apart from Graphics designer and book keeper. Our company and employees like it like.

further most of our work simply is not possible to do by sitting on a computer at home. We are based in Sydney’s west. Most warehouses were completely operational and I would say 95% of the workers on site.
Some admin staff were kept.


I’m suprised how many business only need a computer by the sound of it.

Can I ask what every one that works from home computer does? As in what do you produce ?

 

I’m a Business Analyst working for a recruitment company so have almost no need to be in an office.

It’s worth noting we have over 1800 temps in which we sent out over 1200 WFH WSI’s
Meaning most of our staff continued to work unaffected from home. This is across many different industries and job types.

I think all businesses (where possible) should adopt an office/home working environment. A couple of days in the office and a few at home.
This will mean a fairly significant reduction in requirements for office space.

I have spoken to a few friends with CBD locations and wheels are already in motion for this. To be fair I don’t think most people realized that WFH in such a large scale was possible and probably would never have if the hand was not forced.

The longer this goes in the more obvious it’s becoming that offices aren’t what they once were.

 

I'll describe myself as a SQL Developer/analyst.

Basically it feels like all my colleagues (mental health/EAP provider industry) can operate from home.

Your computer with the normal software and the ability to video conference/MSTeams is just about all you need. At the moment the only reasons I know of for anybody to see other colleagues is if their laptop is having issues that cannot be fixed remotely or some software needs to be installed (for whatever reason they seem to not do that remotely).