A national vaccination effort is finally underway, and many expect to see some palpable shifts toward pre-pandemic normalcy over the next 12 months. One trend that may not be heading in the opposite direction anytime soon, however, is the rising number of individuals nationwide switching to work-from-home lifestyles.
According to a flash survey conducted by S&P Global Market Intelligence in October, 64% of companies responding to the questionnaire reported that the increased number of employees working from home is expected to become a permanent change. Additionally, a third of organizations indicated that the shift in operations caused by remote work was so significant that they are permanently shrinking their office footprint.
This storm of new developments could mean turbulence for office real estate, as well as produce new currents to navigate for the multifamily industry.
Steadfast Wi-Fi Becomes Key Differentiator
Access to quick and consistent high-speed internet had become one of the most sought-after amenities by renters prior to the pandemic. In fact, according to a 2018 survey of 1,000 renters by multifamily software firm Entrata, renters were more likely to pay a premium for high-speed internet over any other amenities.
The ongoing shift toward remote work will put even more pressure on apartment operators and developers to ensure that their product will offer competitive internet access in terms of speed and network security.
Expect the large body of professionals switching to a permanent work-from-home lifestyle to raise the bar for both internet speeds and Wi-Fi security to unprecedented levels. The trend stands to impact not only luxury apartments, but also the middle-income and workforce units that demonstrated appealing resilience amid pandemic-related economic uncertainty.
Work-from-Home Offices Influence Apartment Architecture
The shift of workers from their office desks to their dining tables will affect the apartment industry beyond forcing apartment operators to adopt stronger digital strategies. One example is a potential adjustment in how floorplans are evaluated with respect to the ability to operate a home office.
In recent years, one-bedroom apartments with extra rooms like dens or study rooms have grown less popular due to the economics of space. Renters were simply interested in cheaper options with a bit less square footage. This trend may see itself reverse itself somewhat in 2021 if more renters have the thought of a work-from-home lifestyle at the top of their mind.
Along the same lines, only time will tell how the the era of social distancing will impact the long-term behavior of residents. Will coworking spaces still be appealing enough to serve as an incentive for driving apartment demand? If the answer is no, will renters be willing to pay a premium for dedicated workspace? Keep an eye on new apartment floor plans for some indication of which way the industry is heading in 2021.
Wi-Fi Value Could Drive Renovation Strategies
Another trend in apartment operations that began to pick up steam prior to the pandemic is the installation and management of revenue-generating on-site networks. Rather than striking up deals with local cable companies, some apartment operators were leveraging third-party resources to offer internet service directly to their customers.
It is not crazy to imagine that a surge of individuals working from home could create a demand for new tiers of premium internet service. Apartment operators will no doubt look to use these strategies to drive up the value of their properties. Installing and managing on-site high-speed internet networks could also become a key renovation strategy for adding value to apartment deals in 2021.
Earlier in the year, Berkadia highlighted four under-the-radar metros that would benefit from a long-term increase in the number of work-from-home renters. Visit our blog in the future for updated insights on this and other developing trends via our weekly content updates.