Amazon (NASDAQ: AMZN) recently made it clear that most of the company’s staff will likely be back to the office by fall. This move comes in contrast to other tech companies, which are dumping office space and making plans to have employees work remotely on a long-term basis.
Good news for office buildings
Amazon believes in-person work lends better to collaboration and efficiency, a big reason why it’s pushing to have staff back to in-person work in just a few months’ time. Given where we’re at with vaccine rollouts, it’s a reasonable goal.
President Biden initially declared that all Americans will be eligible to schedule a coronavirus vaccine by early May, and he’s since pushed that timeline up to April 19. That gives Amazon workers — and other workers, for that matter — ample time to get vaccinated, even with the understanding that it can take up to six weeks from the date of an initial jab to be considered fully protected.
Of course, Amazon doesn’t expect a hard stop on remote work this fall and a mass invasion of office buildings to follow. Rather, the time frame for returning to in-person work will vary by location and will hinge on infection and vaccination rates. Amazon also plans to impose social distancing requirements and implement other safety measures in its offices in an effort to keep workers safe.
Throughout the pandemic, Amazon has received a lot of criticism for its mistreatment of warehouse workers, a large number of whom have fallen ill with COVID-19 over the past year. As such, it’s likely that it will step up its game to avoid the same mistakes in its offices.
Amazon Web Services CEO Andy Jassy has also indicated that he doesn’t expect his workforce to return to work at 100% capacity this fall. Rather, he anticipates a hybrid model where many employees work in person part of the time but do their jobs remotely for a portion of the week as well.
Either way, Amazon’s plans are good news for office buildings, which have been grappling with vacancies since the start of the pandemic. If more companies follow Amazon’s lead, office buildings could see a nice uptick in leasing activity as companies secure plans and commit to longer-term arrangements. Once leases pick up, office building REITs (real estate investment trusts) may quickly recoup some of the value they lost in the course of the past year.
Remote work may not be the norm
Though some companies may intend to keep their workers remote even once the pandemic is behind us, a lot of major players have stated that working from home will not become the norm. The fact that Amazon is making firm plans to bring workers back to office buildings solidifies that stance — and that alone is a good reason for office building investors to be encouraged.