The COVID-19 pandemic continues to reshape the commercial construction industry.
Many companies that the lease office space are continuing to keep workers operating remotely from their homes. While many businesses are still hoping to bring staff back in stages through 2021, some workers may never go back to a conventional office. The long-term leases that these companies have signed will protect the real estate companies from an immediate loss of tenants to a certain degree. However, many of these firms with long-term leases are offering their unused space to others, resulting in a sharp jump in efforts to sub-lease this unused office space to new tenants.
The flood of newly available office space for lease (or sub-lease) will put a damper on new office space construction, as excess capacity keeps a lid on rents and makes it difficult to justify new construction for investors.
However, commercial remodeling activity may get a boost as sub-leased space is reconfigured for new tenants. Additionally, even companies that are still retaining and planning to use their space are undergoing renovations to accommodate social distancing norms with more walls, improved ventilation and filtration, and additional entrances to minimize crowds of workers.
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