durham inc.
COMMERCIAL OFFICE SPACE IN THE POST-’DEMIC SOME HESITATION AMONG TENANTS BUT – FOR THE MOST PART – DURHAM IS ‘STILL BULLISH’ ON THE OFFICE
BY BRANDEE GRUENER
2m/ 6ft
orkers all over the Triangle remain holed up at home with their laptops. Offices sit empty while managers assess when everyone can return and what that will look like. Should open floor plans be walled off to prevent the spread of germs? Do workers need to stay home except for meetings and collaboration? Should company owners continue paying rent on such a large space? After a year of working remotely, how much office space does the company really need? Real estate brokers and property owners are holding their collective breath as they wait for tenants to make decisions, but the sluggish market hasn’t curtailed optimism for Durham’s future. They remain bullish because
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of the city’s population growth, companies looking to relocate from other regions and major funding in life sciences. No one is certain what will happen to rents, but prices so far remain steady. Development timelines have lengthened, but investments in properties continue to happen. The market might be on pause, but it has held. “The cost of capital is very low; there’s plenty of available
april 2021
capital, and we’re one of the sweetheart markets a lot of investors are looking for,” said Brad Wiese, president of Maverick Partners Realty Services. Though his brokers have seen “very little movement or demand for leasing space during the pandemic,” the full-service commercial real estate firm has remained busy. “Purchase of office space by owner-occupants and investors, in my opinion, is as strong or stronger than pre-COVID life,” Wiese said. Still, many wonder if the work-from-home phenomenon will lead organizations to reduce their footprints. Scott
Selig, associate vice president for real estate for Duke University and Duke Health, is responsible for a real estate portfolio containing 4 million square feet. He estimated that Duke’s footprint could shrink by 25% over the next five years due to a more hybrid workforce and telemedicine. Some projects, like the replacement of the old Macy’s