For the past two years, many workers have been doing their jobs remotely due to pandemic-related concerns. Thankfully, the omicron coronavirus surge seems to be tapering off, so now, more companies are making plans to bring workers back to the office.
But whether workers get on board easily is another story. At this point, many employees are used to remote work, and they've become fans of it. And in an age when jobs are abundant, some people may decide that they'd rather take their chances at a new remote job than return to the routine of a daily commute.
Vornado Realty Trust (VNO 1.30%), a REIT (real estate investment trust) with a portfolio consisting largely of office properties throughout New York City, wants workers back in person as well. In fact, it needs a steady return of tenants to thrive. And it's taken a big step to help make that happen.
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Enticing workers with food
Many workers being called back to the office are pushing back, so employers are increasingly being forced to step up and make in-person work worth their while. Vornado is hoping that free food will do the trick. It's teaming up with Sharebite, a food ordering platform, to offer its building occupants the opportunity to order food delivery without incurring fees.
In fact, Sharebite will serve as the sole food ordering service at Vornado's 33 office buildings throughout Manhattan. Each building will feature a Sharebite Station -- a drop-off point where food gets delivered -- to avoid congestion in different building areas.
To be clear, no money changed hands in the course of Vornado and Sharebite's partnership. Rather, the deal benefits both in that Vornado gets to lure more tenants back to the office, and Sharebite gets access to a larger number of customers.
As of late January, 40 of Vornado's tenants had signed up for Sharebite's service. Vornado has also rolled out a special app for tenants to utilize for food-ordering purposes.
Will more office landlords follow Vornado's lead?
Vacant offices are bad news for REITs with large concentrations of these properties in their portfolios. At this point, it's going to take a fair amount of creativity to get workers back in person. And so office building landlords would be wise to follow Vornado and take similar steps to lure tenants back in.
That doesn't necessarily mean just partnering with food delivery services and thinking that's enough. Office landlords can take other steps to entice workers to come back. Offering free or discounted on-site parking, for example, could do the trick of luring tenants back, since these days, many people are skittish about taking public transportation but face a lack of affordable parking -- especially in Manhattan.
Despite high office vacancy rates, Vornado has managed to have a decent year, and its share price is up 21% from where it was 12 months ago. But for office REITs like Vornado to thrive, they need bodies in buildings. And Vornado's recent move is certainly a step in the right direction.
