Tom Daykin and Jeff Bollier
Milwaukee Journal Sentinel
As the United States and Wisconsin reopen, workers will most likely be returning to their offices gradually as businesses adopt social-distancing policies to combat the coronavirus pandemic.
That’s the consensus among office building developers.
The expectation is that some companies will embrace working from home and reduce the size of their offices even as others seek more space to ensure staff employees can keep their distance from each other, said Jeff Weyers, a founding partner in the Green Bay-based developer Commercial Horizons.
“The effect on the office market will be a pause where all office users and tenants re-evaluate their overall space needs,” Weyers said. “Many don’t know yet what they will need going forward. It’s going to be a mixed bag: I expect some will downsize and others will need more space.”
Office developers will be ready to help firms adapt.
“We think it’s an opportunity to design their space for the new normal,” said Mark Irgens, chief executive officer of Milwaukee-based Irgens Partners LLC.
His firm’s BMO Tower, the newest office tower in downtown Milwaukee, just opened in April.
Irgens said 55% of the 25-story, 379,600-square-foot building, at 790 N. Water St., has been leased. BMO Tower has two anchor tenants: BMO Harris Bank and the law firm Michael Best & Friedrich, which together occupy 189,300 square feet.
On a recent day, a handful of people were working in its offices.
“The date we had planned for the move into our new BMO Tower was pushed back due to the COVID-19 situation,” said Patrick O’Herlihy, senior manager for public relations.
BMO Harris is moving the belongings of its employees into the new building.
“To assist with the transition, a handful of employees in a few key functions are starting to work in the new tower,” he said. “However, the vast majority are still working remotely.”
How will more than 1,800 people eventually working at BMO Tower comply with social distancing? For now, the building’s fitness center and conference room are closed.
And, once those accommodations are open, there will be steps taken to keep people at least 6 feet apart from each another — measures that will be in place throughout the building’s commons areas, Irgens said.
Perhaps the biggest choke point will be the elevators. There will be fewer people on each trip, he said.
And, one way to help make that happen would be for the building’s tenants to stagger starting hours so “not everyone comes in at 8,” Irgens said.
Tenants also will most likely be enforcing social distancing within the space they lease, he said.
Meanwhile, as a new building, BMO Tower has features that Irgens said will help combat the pandemic. Those include a high-end ventilation system that helps keep the air clean, and a touchless elevator system.
Other new office developments are taking similar steps.
They include the River 1 mixed-use project, which overlooks the Kinnickinnic River at South First and West Becher streets, south of downtown Milwaukee.
That Harbor District development includes an eight-story office building with just over 200,000 square feet of space, a project scheduled to be finished by the end of 2020. It already has its anchor tenant, Michels Corp., but continues to look for other occupants.
Other new projects in the works include a five- to six-story building with up to 168,000 square feet at Allis Yards, a mixed-use development on South 70th Street, south of West Washington Street, in West Allis. Cobalt Partners LLC is seeking tenants for the building and plans to begin construction on it in spring 2021.
Allis Yards and River 1 are considering such features as advanced air filtration systems, motion-activated restroom doors, one-way entrances and exits, touchless entries and elevators, wide hallways and interior furnishings that are meant to be uncluttered and easy to sanitize.
Meanwhile, Commercial Horizons has been developing and managing various retail and office properties in Green Bay, Appleton, Manitowoc, Janesville and Eau Claire. Weyers said the company’s current construction projects remain on schedule. They include UnitedHealth’s new, $35 million office off I-41 in De Pere and a new multi-tenant office building in Titletown District in Ashwaubeno.
One or two prospective tenants in the Titletown office building have told Commercial Horizons they are “hitting the pause button,” but Weyers expects demand for space in the building to remain strong.
“It’s not that anyone cancelled or pulled out, it’s that they’re re-evaluating their needs,” Weyers said. “So far, it’s been good. Only a handful of our tenants have called us to discuss their businesses. They know it’s just a pause. We’re cautiously optimistic.”
Looming over everything is a question over whether a significant number of office employees will continue to work at their homes even as the pandemic eventually wanes.
“Landlords are worried that the work from home trend will reduce the square footage required by office tenants,” according to a report from Milwaukee-based Founders 3 Real Estate Services..
Still, developers aren’t yet expecting a large, permanent shift to people working from home in Wisconsin. That would go against a recent trend in which office tenants have been seeking out sites which encourage employees to work together more often, said Scott Yauck, who operates Cobalt Partners. Many designs now set aside space for both formal and informal meetings.
As a result, offices now tend to have open layouts with few private areas, he said. Also, concerns about COVID-19 could lead some tenants to lease more space than initially planned to better spread out employees, according to the Founders 3 report.