Writer: Max Crampton-Thomas
2 min read May 2021 —Bridge Commercial Real Estate (“BridgeCRE”) is a commercial real estate firm specialized in five-star office leasing, property management and construction services. CEO of the firm Jeff Shaw spoke with Invest: about changing attitudes towards home office, characteristics that make Atlanta a more attractive market for business development and his outlook for the region through the rest of 2021.
How has the last year progressed for the company?
In relation to our business, we decided to come back to the office when we felt it was safe, and over the course of about nine months we have had no issues. Funnily enough, we ended up signing more leases in 2020 than we did in 2019, which was a record year. This was contrary to the narratives we were hearing about the commercial real estate markets. Our business never slowed down, and our tenants always paid the rent.
I think there are two demographics primarily. There were a lot of concerns from those people living in the suburbs, who did not feel safe commuting to an urban center and working in a large office space. But our company has been focusing on prime suburban markets with a lot of new development and retail. We saw recovery in those markets where there was more of an appearance of safety for people. We spent money to check that filtration systems were strong, and to increase cleaning processes and air volumes. We found that by August we were at 60% re-occupancy. Slowly, we have seen an increase and as of May 1, we were around 70%. It helps that markets such as Atlanta did not put occupancy limits on office spaces.
How are attitudes developing toward home office?
We have been extremely flexible with employees and their personal situations. Now, all companies are looking at the actual impacts of home office, and whether working from home benefited or disadvantaged firms. People are signing more leases now because they are going ahead with business plans that they had to scrap last year. The first ones to come out were the small and medium-sized businesses that are much more nimble than large corporations. Working from home has begun to fray relationships and the company culture. There are so many networking opportunities available in a corporate office space. Working from home will also affect consolidations and redundancies. Companies can now take less space and rotate people, which works from a business perspective. Essentially, all these decisions being made right now are part of an experiment. We had some companies that were not actively using their space because they had no essential use. But there were also a lot of laboratories and law firms that never left or came right back as soon as they could. This trend will be interesting to watch in the next year.
What characteristics make Atlanta attractive for companies?
Atlanta is suddenly getting a lot of attention from a lot of large companies that want to locate here. What they have always been looking for is good people, complemented by great universities that will maintain a large pipeline of talent. Atlanta has a hub airport, great convention areas and more importantly, significant diversity. When Microsoft moved to Georgia, it wanted to find a business-friendly state that could supply it with software engineers. There are issues with the traffic and public transportation, but the region is a very affordable place to live for most people and people enjoy staying in Atlanta after they graduate from the universities.
What is your outlook for the region in the next year?
I think activity will be quite flat this year, with some losses alongside some wins. There is a lot of positive absorption coming and, on the frontline, we are seeing the activity that will show up in the data later on. This environment creates opportunity because so many people are still so hesitant, which gives us the great opportunity to really put in the groundwork right now. I think 2022 will be a great year. I believe there is a lot of pent-up demand that will come from risk aversion in the next year or so. When that risk is removed, it will be back to business very quickly. It will be interesting to watch what happens in gateway cities, such as New York and San Francisco. The amount of vacancy is much higher there and some of the co-working companies really dumped a lot of space coming out of those cities. They made the mistake of being largely absent from the suburban markets.
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