Office buildings in the Tucson market are increasingly vacant as some employers struggle to get workers back into the office, while others contemplate the need for one.
Many companies are downsizing their footprint and looking for alternatives to cramped workstations to offer gathering places with open seating for those who want to work from an office a few days a week.
Nearly 15% of offices in the Tucson market are currently vacant.
When the return to the office began, many employees eager to get out of the house were disappointed with the new work environment.
“Teammates are not here, the manager is not here and, the irony is, that he will meet many of his colleagues through hybrid meetings,” said Gilles Raymond, CEO of Letsmeet, a site for booking meetings. “On the other hand, if (employee) stays home, it saves one hour of subway or traffic, (employee) can have lunch with the kids, can have a quick game with the dog, and receive the Amazon delivery.
Vacated office spaces by call centers, like the former Comcast space pictured, are a hard sell because they were set up to be efficient by getting as many people in one space as possible.
“What life sounds the best to you?”
LinkedIn reports that 50% of applications for new jobs are for companies that offer fully remote work.
David Montijo, an office and medical real estate broker with CBRE in Tucson, said vacated office space by call centers are a hard sell because they were set up to be efficient by getting as many people in one space as possible.
With a computer, phone and internet connection, those workers were able to go home and continue to do the required job.
One of the biggest vacancies that happened after the COVID-19 pandemic started was Comcast vacating the 211,152-square-foot space on Oracle Road, near Tucson Mall.
Earlier this year, Southern New Hampshire University terminated its lease with Pima County for its office at 97 E. Congress St. after the majority of employees said they would prefer to continue working remotely.
The 2016 grand opening of the Comcast customer support center at 4690 N. Oracle Road in Tucson. Comcast has since closed the office and the building is vacant. Video by Rick Wiley / Arizona Daily Star 2016
Design shift
“We now have 1 million square feet available that was not there before the pandemic,” Montijo said. “What’s going to change is how offices are designed.”
A company with 80 employees, for example, may only need 50 workstations.
And, since Tucson does not have a lot of companies with headquarters locally, decisions about space needs are being made from out of town.
“The shifts of an unpredictable post-COVID office climate, rising vacancy and falling lease rates has dampened development appetites for the time being,” according to the most recent CBRE office report.
“Yet, it is likely that some appetite will return, most likely for Class A product, as office users determine their ideal work arrangements and adjust their real estate portfolios accordingly.”
In the Tucson market, there are currently no new multi-tenant office buildings under construction.
The U.S. Census Bureau reports that large cities such as New York, Chicago, Los Angeles and San Francisco lost the highest percentage of residents in 2020 — between 40,000 and 305,000 that year alone.
Tucson was a recipient of many of those folks who came here to work, but not from an office.
Southern New Hampshire University broke its lease at 97 E. Congress St., after employees said they wanted to work from home.
“I believe we see a trend that leads to the end of the work-from-office as the absolute rule,” Raymond said. “It might be scary, disturbing and challenging, but you have no other choice than to embrace the change.
“Embracing it will give you the choice to organize and structure it.”
Montijo said some office building owners are looking at converting obsolete space into apartments, self-storage units or medical suites.
“We’re going to see a lot more of that,” he said, noting that offices of the future will likely have more amenities for employees but less dedicated seating.
“We’re going to get better than we currently are,” Montijo said. “It will be choppy for a little bit as regional companies make decisions.
“But there’s always going to be a function for the office.”
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