It looks like a long haul for the downtown Boston commercial real estate sector
Even as Covid vaccinations bring a return-to-office closer to fruition, more companies are expecting to reduce their real estate footprints.
A recent survey conducted by the American Institute of CPA found that 21 percent of company executives said they expect to reduce their office space in the next 12 months, Bloomberg News reported. That’s up by 3 percentage points from the third quarter of 2020.
At the same time, 72 percent of executives said they expect no change in their office footprint, down by 5 percentage points from the third quarter of 2020.
“As the recovery progresses and we move toward the next-normal, more and more people will return to their traditional places of work,” Ash Noah, vice president at the Association of International Certified Professional Accountants, told the publication. “But this doesn’t change the fundamental shifts we’re seeing toward more virtual and remote operations.”
After an awful year for much of the Boston real estate world, executives see full recovery not happening this year or even next.
A survey of real estate executives found 70 percent said that the commercial real estate sector will not return to pre-Covid levels until at least 2023.
The email survey drew responses from 144 owners, developers, investors, asset managers, brokers, lenders and consultants.
Their most pressing concerns were the shuttering of restaurants, gyms and other businesses; eviction and foreclosure moratoriums; and a recession in the United States.
Moreover, 90 percent believe that the shift to work-from-home will have long-term impacts on the office market, while 70 percent think the same for the residential market.
Although Biden has talked of doing away with 1031 exchanges, 62 percent of respondents did not expect tax reform to have a significant effect on the industry this year.