Office life will change, but the need for offices won't

One item that stood out in this typically slow season for business news is the sale of a downtown Minneapolis parking lot to the global real estate developer Hines Interests.

That site has been a good one for a new office building for decades, just a block or so from both the Target and U.S. Bancorp headquarters.

If you bought the notion that the pandemic destroyed the appeal of big office work clusters like downtown Minneapolis, the sale of that parking lot might have been a surprise.

What office work is like in a year is hard to forecast, but it's way too soon to conclude that downtowns won't recover their daytime population of workers.

When people do come back, the sandwich and coffee shops, cellphone stores and so on will hopefully come back to life, too.

For those now worried about feeling safe enough to walk around in downtown Minneapolis, there's no better fix for that than having thousands of office workers there every day.

The office market isn't exactly hot right now, of course. The current cycle is expected to bottom in 2021, according to the global real estate firm CBRE. In addition to weak demand, the market will have to absorb a lot of sublet space that got freed up in the second half of last year.

Readers might remember I have family members in the commercial real estate business. If they are worried about a recovery, they haven't said so.

It's clear that work won't be the way it was before the pandemic hit last year. Strict office hours will give way to far more flexibility.

Yet if there really were a profound switch underway in how companies think about their workspaces, it might have been easier to find a big Minneapolis employer that's embraced a whole new approach to remote work.

After checking with a handful of them, none said their organizations are rethinking the whole idea of regular office work downtown.

An executive at one company said its new headquarters workspace was built to foster collaboration and that it was eager to see people return when it was safe.

Another, Xcel Energy, said via a spokesman's e-mail that Minneapolis will remain the company's headquarters town, and as the company invests in our region it plans to "ensure that, as our economy recovers from the COVID-19 pandemic, we also help downtown Minneapolis, and the city as a whole, remain as vibrant and safe as ever."

A handful of big employers have made news by going in a different direction, notably tech firms such as Twitter, Google parent Alphabet and Facebook. Yet work from home seems to solve a problem they have that a midsize Twin Cities employer does not.

While they can easily afford downtown San Francisco office rents, the painful cost of being there is shouldered by their workers — and workers they hope to recruit — who all need to live within a reasonable commuting time from the office.

Houses that would sell for $350,000 in Richfield would sell for maybe $2 million in Silicon Valley towns such as Palo Alto, and with a longer typical commute in Northern California, too.

But even as companies like Facebook were talking about half of their staffs eventually working remotely and recruiting executives to fill newly created roles like director of remote work, they were still tying up additional office space.

Months after the start of the pandemic, for example, Facebook made headlines in New York by agreeing to lease a sprawling, re-purposed post office in Manhattan that will add more than 730,000 square feet of offices to the space that Facebook already occupied in the city.

The writers at TechCrunch who follow Silicon Valley do seem to think work is fundamentally changing, flipping the conversation last year from the future of work from home to talking about enabling work from anywhere, which is not the same thing.

Working at home during the pandemic can often be a real pain, with unpredictable internet connections, unhappy kids crashing into meetings and dogs loudly announcing a UPS delivery.

Work from anywhere can mean working at a remote vacation spot overlooking a lake (good luck getting a fast internet connection) or a pleasant, shared office suite in a far more affordable city a long way from Facebook founder Mark Zuckerberg's desk.

By now there have been a lot of worker surveys about what they really think about working from somewhere other than the office, although some felt like they asked school kids in June about how they feel about summer vacation, rather than in late August after the summer camps have shut down and they haven't regularly seen their friends in two months.

For getting stuff done on your own — preparing reports, analyzing engineering data, processing files and the like — it seems that if anything productivity during the pandemic may have increased.

Collaboration might be another matter. About half of the respondents in a 12,000-worker survey conducted last year in the U.S., Germany and India by the Boston Consulting Group said productivity on work done with others was the same or even better. But, of course, that left half that thought productivity had slipped.

This is a real worry, because the benefits of collaboration are genuine and well understood, the reason why business clusters developed in the first place. In downtown Minneapolis, the opportunities to find out a little information or make a personal connection present themselves every lunch hour when walking through the skyway to a sandwich shop.

Digging into the details, the BCG study authors found that factors including mental and physical health mattered in how people responded to this question about collaborative work. And social connections mattered most of all, as they observed that "social connectivity … is what enables us to be collaboratively productive."

One big lesson they drew is that making it easier to build and maintain those social connections has to be a priority if organizations are going to succeed with staff working remotely.

One solution to this problem seems to be having an office for people to work next to each other, with a pot of hot coffee nearby.

lee.schafer@startribune.com 612-673-4302