Will workers return after COVID-19?

Few worlds blew apart with the pandemic like our lives at the office.

All those empty cubicles, hallways, parking lots and so many wilted plants echo a key question for commerce in Salt Lake City’s urban core:

Will the workers return? Long term, post-vaccine, will our need for interaction bring back those office settings?

“I would refer you to the history of the human race,” said an upbeat Dee Brewer, executive director of the Salt Lake Chamber’s Downtown Alliance. “We started gathering around the campfire, and then we built huts and towns and cities, and we kept gathering and gathering and gathering.

“We are social animals, and there is creativity and opportunities that are created in those gatherings and with density,” Brewer said. “People want to do that, and they will do that.”

The past months have disrupted so much of how we view workplaces and routines — from safety, hygiene, co-workers, shared spaces, touched surfaces and so much else on the job. But the attractive and self-sticking side of human nature is something else again, experts say, and is combining with some longer-term market fundamentals in Utah’s capital to give key players an optimistic view.

Even now, rents for office properties in the Salt Lake City market continue to inch upward, even with no end in sight on the coronavirus crisis. Developers are building nearly 1.3 million additional square feet of new office spaces, too, with about a quarter of that set to open by year’s end.

“History and pandemics in the past have shown us that, yes, these kind of things are significant and will impact the way we do business and live our lives to some extent,” said Gary Ellis, president of Utah-based Jacobsen Construction, a major downtown builder. “But I don’t think this is going to destroy our normal way of life.”

Initial indications during the onset of the pandemic, after the abrupt shift to telecommuting, showed that productivity jumped by working from home in many cases. Some employees have treasured the new flexibility, reduced distractions from office life and the lack of a daily commute.

Many have reported unforeseen demands on their time at home in similar surveys, such as having to care for family members or help school-age children with remote learning while balancing workloads. Others miss the daily casual exchanges with colleagues.

Yet, in Salt Lake City’s case, the specter of the virus remains a palpable factor.

Now, a major share of those office floor plans across the city are uninhabited or populated by much slimmer staffing.

Salt Lake City employers who are bringing back workers to the office gradually face a complex set of choices, according to another study, and that is going to make the entire picture cloudier in coming months.

Real estate analysts at Newmark Knight Frank found that employers are often dealing with reduced numbers of workers overall during the pandemic while having to figure out how to socially distance everyone and take other steps to keep their workplaces safe. That has blown up previous thinking on what office floor plans look like.

Some large employers are clamoring for more office space to spread out their workers, brokers said. Others need less room because fewer will be there in person over the long haul. Some aren’t even entertaining the question of bringing back their workers to the office en masse until sometime next year.

Where all that ends up short term on total office square footage across the Wasatch Front, according to Salt Lake City real estate analyst Kip Paul, “we don’t know the answer yet.”

But there are bigger signs that demand for office spaces in Salt Lake City will continue on an upward slope, thanks to Utah being seen as a potential refuge amid a coastal exodus.

This is the place — again

As the pandemic wears on and new waves of infections seem to be taking hold in a number of states, strong signals are emerging of an outmigration from crowded cities on U.S. coasts to more suburban and rural locales, accelerated by the trend of working from wherever you call home.

It’s not just out-of-staters relocating to Utah, either.

With interest rates at historic lows, agents are reporting rising demand from domestic buyers for homes in the suburbs with larger backyards — as well as immense appetite for additional rooms to be used as home offices.

That’s a stark number after nearly a decade of rising prices on the Wasatch Front had already pushed the average home out of reach for most first-time buyers, sparking what officials were calling an affordability crisis before COVID-19.

There are ramifications for offices in all that as well.

Just as out-of-state executives and skilled workers newly uncoupled from their physical workplaces are fleeing to places like Utah, more and more employers and institutional investors in coastal cities are thinking along similar lines.

And while its economy has suffered along with the rest of the world since March, Utah’s unemployment rate, at 5%, is well below the national average. Companies continue to relocate to the state, drawn in part by its skilled workers and relatively lower wages.

All those features look even better now, many observers say, as more companies decouple from a physical workplace and seek to migrate out of more heavily populated areas.

“We’re getting calls all the time from people saying their research points to Utah as a one of their top three or four markets,” Ellis said. “People are seeing what a great place this is to live and that it is outside of the major metropolitan areas. And so I think we have a lot of things going for us.”

Paul, with Cushman & Wakefield, recounted an August conversation with the manager of a “sizable” New York-based investment fund.

“He asked me, ‘If you don’t have to live in New York or San Francisco and ride public transportation and go up a 60-story-building elevator every day, why would you?” he recalled. ” ‘If I could move my family to Salt Lake, I’d do it tomorrow!’

“We hear that theme,” Paul said, “over and over.”