Giant Companies Switching to Remote WorkSep 24, 2021
A lot of big-name companies have been announcing policies allowing their employees to work from home. Does this affect real estate investors and landlords? In a recent episode we look at some of these companies and what they've announced that may be felt by multifamily investors nationwide.
Watch the full episode, here: https://youtu.be/lHJQ1BVdPBk
Is what you would use to evaluate the employment base of a market permanently changing?
So what I've said earlier, I named off some companies. Let's pick on one of them and talk about how it kind of bat this around for a minute.
"remote work plans employees will have the option to work from home approximately 50% of the time and in the office the remainder of the time. So that probably doesn't affect you.
You're looking at a market like St. George, Utah and you say well, the employee's probably going to live near the office. But I still think there's a domino effect in real estate because you can't tell me if Adobe is requiring employees to work at home.
And we have a ton of Adobe here where we live a part of the time that they're going to keep their entire giant office in San Jose open. They're probably scaling that back.
What do you think about that? Would they do that and what do you think that means?
I think they're saving a lot of money on rent. And then they're realizing that some of these employees are actually putting in more quality time to get their work done and are doing it in shorter hours, versus, you know, having chat at the watercooler so to speak.
So I think that they're actually getting some people to be more productive.
Another one on here was Capital One.
They said that they're trying, "a flexible hybrid model that will not require employees to be in the office a certain number of days. Some employees were able to work from home 100% of the time."
So I think employers are going to try to figure out, Hey, does it 50% of the time work or? No, what about 100% of the time?
Here's another one, Dropbox.
"Dropbox will let all employees work from home permanently existing office space will become Dropbox studios."
Well, that's slick, where people can choose to go into work.
So your relatives had the choice. And they made it. Right, I was out analyzing a market. I was in Fort Wayne, Indiana. I saw one of those giant yards that had like 1000, Chevy Silverados and GMC Sierra is that can't get the chips. They make a lot of those in Fort Wayne. And I was, you know, looking at some opportunities there. And it's kind of a manufactury, Rust Belt, type city. And I began to see a different picture.
Granted, that's a heavy influence. Because the funny thing is, this employee from Dropbox wants to go work from home, somebody's got to make their microphone and their computer and their desk chairs. There's always that manufacturing demand. But so I think we're not saying the whole economy is mobile, but a significant portion of it is now mobile.
But interestingly enough, what did I see in Fort Wayne, I saw that younger crowd moving in downtown, I saw new buildings under construction. I saw people moving into offices and people taking restaurant and hospitality jobs, and tech jobs, I'm more and more of that, because they moved to somewhere that was a little more affordable, that was a little bit more business-friendly, right?
They attract, frankly, they're attracting those jobs out of Michigan. And Illinois is what I observed.
Here's another one...
"Facebook in June 2021 announced employees can work from home, permanently."
Crazy. Even Ford Motor Company, employees can work from home.
And It says work from home indefinitely with flexible hours. So if I'm a mom and having to work, having flexible hours is huge. Because if I have little kids that I need to get off to school, or if I'm still doing remote learning, I'm gonna have to be with those kids and help them. So maybe my hours really are more of a nighttime type of job. I think flexible hours are huge too.
Lincoln Financial Group, ironically enough, had a headquarters in Fort Wayne, where I was. Hundreds of employees are not eligible for permanent remote work.
We have a colleague that we've worked with moving his family to Costa Rica. That's where they're going crazy that you can do this stuff now.