7 Reasons Not to Give Up on Office Buildings This Year

If you're a real estate investor with office REITs, or real estate investment trusts, in your portfolio, you may be growing increasingly anxious by the minute. The omicron variant of the coronavirus has forced many companies to delay their office reopening plans yet again, and the longer those buildings remain vacant, the more prolonged the sector's recovery is apt to be. In spite of that, here's why you shouldn't be too quick to write off office buildings this year.

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Though the omicron wave took the U.S. by storm, health experts have reason to believe the current surge may be relatively short-lived. In fact, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has predicted that the latest COVID-19 wave may reach its peak in the U.S. by the end of January. If that happens, we could see workers return to offices in time for spring.

There are already a couple of at-home pills hitting the market with the ability to mitigate the effects of COVID-19. As those become more widely available, concerns regarding COVID-19 transmission could wane, making it more feasible to enforce workplace returns.

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In late 2021, President Biden pledged to ship as many as 500 million at-home COVID-19 test kits out to the public in an effort to ramp up screening efforts. Right now, those kits are difficult to come by, making it more difficult to bring workers back to offices with confidence. But once those test kits aren't in short supply, workers will have an easier time self-screening, potentially leading to a more robust (and safe) office return.

Before the COVID-19 outbreak, many people weren't used to the concept of social distancing. Now, it's practically a given, and office buildings have gotten wise to that. Many have implemented measures designed to minimize crowding and make workplace returns safer.

Right now, a lot of companies are keeping their employees remote out of necessity. But once it's safe to return to offices, they have every intention of doing just that. And that should give office REIT investors some peace of mind.

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The remote work setup isn't right for everyone. Not only do many employers want to bring workers back to the office, but many employees would rather do their jobs in person as well. And if that attitude persists, it could fuel a more widespread return to office buildings once the current COVID-19 wave subsides.

Many companies intend to keep workers remote on a partial basis even once safety concerns no longer persist. But that doesn't mean they're ditching their office space completely. And as long as those employers continue to have an office presence, there's no reason to think office buildings won't recover.

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Clearly, we're starting off 2022 in a troubling place from a pandemic-related perspective. And that's impacting office REITs in a very big way. But investors shouldn't lose hope. Despite the challenges that may persist during the year's first quarter, there's reason to believe that things will take a turn for the better later on in 2022.

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