Commercial Comeback?

So even before the pandemic hit, I was planning on moving offices. After CONTRACTOR was acquired by Endeavor Business Media we worked out a time schedule with our former parent company to pack everything up and ship everything out. Goodbye office in downtown Chicago (which was just across the street from an amazing little ramen noodle shop that I’m still trying to find a replacement for), hello office in Arlington Heights (which, for those who don’t know, is in the western suburbs).

Then came the pandemic, and now—like many others—I’m putting the finishing touches on a home office. But I still keep in touch with my former colleagues, and just this week heard some not-entirely-unexpected news: they were closing up the old downtown office for good. It can’t have been an easy decision, since my former employer had just undertaken a company-wide rebranding effort that involved extensive renovations to all its offices (and they had more than 30 offices world-wide).

It’s a decision a lot of companies are facing (you can read a couple other office closing anecdotes in Al Schwartz’s management column on pg. 16). Since so many workers are working from home, why pay the rent, utilities and maintenance on empty space? There are a lot of companies in all types of industries who thought they could never have their workforce—or even a significant portion of their workforce—work remotely. Then the pandemic hit and necessity, as it always does, had the final say on what is and isn’t possible.

In fact, a lot of companies out there have discovered that whatever operational efficiencies they gain from the traditional office set-up, they aren’t worth the expense. Some are finding that working remotely is more efficient than working in office. Which has a lot of high-level people in companies all over the world asking, why have a traditional office at all? Group identity? Manager convenience? Collaborative synergy? Because it’s just the way we’ve always done things in the past?

Which means that when this pandemic is finally over a lot of companies will not be returning to the traditional office model. And there’s some economic data to support this. While the Q3 numbers show a big rebound for the US economy (with GDP rising 33.1 percent), as of August, nonresidential construction starts are down 13 percent for the year. Contrast that to privately-owned housing starts that are up about 11 percent over the same time period.

But there are some interesting possibilities emerging as people try to come to grips with the post-COVID marketplace. I recently had a (Zoom) meeting with Ken Smerz, CEO for a company called Zelus. They offer a wide array of digital services for companies in the construction industry. They are able to combine laser scanning and BIM modeling and apply it to create a “Digital Twin”—an adaptive, predictive digital model of a given built environment. 

The Digital Twin has any number of uses, but one that may be very important for the future of nonresidential construction is “Adaptive Reuse”—finding new ways to use existing buildings. Say you have an office building that would make more money if you converted it to, say, condos? Or a mall that could be better used as a distribution center? The Digital Twin can tell you exactly the changes that need to be made (not just this wall here, that wall there, but in water and energy usage, insulation and HVAC) and how much they are likely to cost.

Make no mistake, building owners are going to try to find the fastest paths back to profitability, and that may mean a lot of new work for contractors.