Looking into the Future of the Office Market

Carl Shilling, a principal at Stantec, joins the Engineering Influence podcast, to share his thoughts on the current state of the office market sector and how it may change going forward.

 

Host:

Welcome to the Engineering Influence podcast sponsored by the ACC Life/ Health Trust. One of the biggest business impacts of the COVID-19 pandemic has been the transition to working at home for many professional and office workers. In many downtowns and suburbs, offices are dark and empty. Not surprisingly. This situation has raised questions about the concept of the office. Many pundits have speculated that our traditional views on the office must change and that remote work will play an increasingly large role, maybe even a major role in the future. Others promote the benefits of the office, collaboration, teamwork, efficiency, and argue that once the pandemic has abated, we will return to the office. This is an important discussion for the engineering industry and for firms that work in the office space. To discuss these issues and more, we're here with Carl Shilling, a Stantec. He has a principal based in the firm's Butler, Pennsylvania office, and has more than two decades of experience focusing on the sustainability of the built environment. Carl, welcome.

Shilling:

Thanks for having me. I appreciate it.

Host:

So in the initial days and weeks of the pandemic, many companies shut down their offices, and employees began working virtually. Assuming that we eventually have a vaccine for the virus,. do you expect the virtual work environment to perpetuate, will we return to the old normal, or will we find something in between?

Shilling:

We, like many companies, vacated our offices and performed our business remotely. And I will admit, I did not expect it to work as well as it has. The technology has come through. We've been very successful in conducting our business virtually through, like the interview today, Zoom meetings, Team meetings, and others. They have worked very well, but as you're asking, as we're thinking ourselves: What do the next couple months mean? What does the next year mean? How are we going to conduct business in the future? Beyond our personal experience, we have also polled a lot of our clients--over 130 of them actually--to get their perception on what they think is going to happen in the future, so that we can position ourselves to design appropriate space. What we found is that although it's been successful, we're missing the human component. So we're hoping that beyond today, tomorrow that there's still going to be some interaction within the office, whether that's two days a week, three days a week. But people have learned that they can be effective from home, so what we used to be considered a luxury--being able to work from home--is now going to be considered the norm. So I think there's going to be an expectation that we still need the office space where we can go in and collaborate and understand our partners, their in-person reactions to real-life situations, but we also understand that we can be effective from home. And there are some advantages to being home with our spouses or wives or children and conducting business from there. So what we're expecting is that, yes, there's still going to be a demand for office space, but that workers probably won't be coming back five days a week 40 hours like they did prior to the coronavirus situation.

Host:

So, as an office designer, as an engineer, what does that mean in office design? Is this going to change it?

Shilling:

It will. One of the questions that's paramount is do you need the same amount of square footage or space to conduct business that you did prior to entering the pandemic? And what we're coming back with is that the dedicated office space that people are used to having, your cubicle, wherever you do your work, is probably going to change because typically it does not provide the right amount of separation or distancing from coworkers. But if we go into design and expect to be able to provide that, maybe the same amount of square footage works, but we have to reconfigure it so that it still promotes interaction between coworkers. We may need to spread out so fewer people are going to be in the office at any given time. Or it's going to take a larger square footage to accomplish the same thing.

Host:

In your conversations with your clients, what are their concerns?

Shilling:

It's kind of the same thing. How do I get my people into the office safely? How do they interact safely while they're there? We've all been out shopping in the meantime during the pandemic and you see one-way aisles. You see limitations of where we can't all go in at the same time. I think that's what we're going to see. You may go into the office, but you have to enter at multiple points so there isn't a large grouping of people at any one location. When you get into the office, there might be direction, it's probably not going to be arrows on the floor, but there's probably going to be within the design, elements to encourage people to not all go the same way or congregate in the same place.

Shilling:

You're probably going to see people spread out a little more than what you see in today's office, but there are still going to be spaces where you can interact with each other and do your work, There's probably also going to be additional technology within those spaces so that your coworkers and staff that aren't in the office at the time can log in or dial and be a part of the team, whether they're there personally or not.

Host:

You mentioned retail as one area that you can take some lessons from. This is a unique situation. So where have you looked for guidance to make design decisions on health and safety concerns?

Shilling:

I mentioned that we do multiple types of buildings and one of them is health care and doing that kind of design has given us a lot of direction on whether the virus is transmitted through the air or is it mainly a contact risk.

Shilling:

Those kinds of things really go across building types. It's not necessarily just indicative of the office environment. And so the first thing, the biggest risk, is proximity to your coworkers. Now we've heard about six- feet distancing. But given the particle size that you put off wearing a mask, does the mask stop it? As the particles dry, do they float longer than a couple of hours? So we're thinking about these issues between workers. We're thinking about how it is distributed by the air handling systems. There' are many aspects as to how do we keep people safe,

Host:

Focusing on HVAC, what changes do you expect to see in HVAC going forward?

Shilling:

The first thing is ventilation. There are three main bullet points and the first one is ventilation. The minimum that we have to think about is, do the systems within the building provide the minimum ventilation rates required by current code, whether that's the International Mechanical Code, whether that's ASHRAE 62, but a lot of office spaces, for energy efficiency reasons have reduced the amount of outside air, have chosen not to do it when they're not there in off-hours, but I think there's a general understanding out there now that we need to continually ventilate the spaces we're in. The benefit to the personnel outweighs the energy demand on the building.

Shilling:

Number two is filtration. Typical filtration for office environments is like a MERV-6 six, 25-30 percent. I think there's an understanding out there that can the particle sizes that we're dealing with be captured by a filter? It can. We're all wearing masks, right? So masks aren't really a very high particulate filter, but the virus lives in things that are larger, like water drops or things like that. The same thing applies to HVAC systems where if we put higher efficiency filters in, there is a benefit to the office environment. The parallel argument with that is I'm going to need more horsepower and fans to push the air through the higher efficiency filters. So there is an efficiency offset with putting in higher efficiency filters. I'm going to use more energy to do that.

Shilling:

Lastly, there are lots of products coming to market that we all trust, that we've been using, that have a benefit with combatting the virus, whether it is additional filtration, HEPA filtration, whether it's UV lighting, whether it's a technology like bipolar ionization. These are all things we need to have in our toolkit and our approach to making spaces safer that we can employ to respond to the demand that's out there.

Host:

In many office buildings, one choke point would be the elevator because you have to get people up upstairs and the elevator is by its nature, a confined space. What do you see happening with elevators?

Shilling:

I've seen a raft of things coming to light. And again, it's are you dealing with an existing situation or are you dealing with a new design? The most creative thing that I've heard reported to me, and it was experienced by one of our own employees visiting a client site was they entered an elevator. And it was an existing elevator. It was a small facility. The owner had attached a sponge to the wall and put a bunch of toothpicks in the sponge. And whenever you entered the elevator, you were to pick a toothpick and use that to push the button.

Shilling:

That was a very low dollar, very innovative solution to be as safe as they could with what they had. On the other end of the spectrum is we're designing new elevators. There are all kinds of new control technologies out there where instead of going to the elevator lobby and entering an elevator and pushing a conventional button, before you even get to the lobby, there's a panel where you can enter where you want to go. That panel then looks at where are the elevators in the building are, directs you to a specific one, and controls how many participants are in that elevator. That particular car delivers you to the floor without ever having to touch anything within the elevator itself. So there is a lot of technology coming out to address that situation. But we have a whole lot of existing elevators that we're going to have to be creative with. What are we going to do for those specific cases?

Host:

The economic forecasts for the office market are pretty bleak right now. What opportunities does Stantec see?

Shilling:

Again, communicating with our clients, there's a lot of waiting to see what happens. I will say that when I left the office back at the beginning of the year, I never expected that we would be gone this long. It has perpetuated far longer than I ever expected.

Shilling:

I think everybody's in a holding pattern to see where this is going. Is there going to be an additional infection rate here in the fall? As the weather gets colder and the humidity level drops, are we all going to be more susceptible to the virus? I think it's going to be another six months of what we're seeing, but I really think that there is a real desire for offices to open back up and for people to at least get back into the office in some way so that we can continue what we're doing. We're surviving just fine, but we are not thriving. We need to do additional things that we're not doing now, such as getting new people into the workforce. That isn't possible remotely like we're doing.

Host:

From an engineering perspective, is it going to more retrofit and renovation work in the office market in the short to mid-term?

Shilling:

I do. Yes. We're going to have to take a look at the existing systems. We're going to assess them. Are they bringing in any outside air or the right amount of outside air? We're going to look at whether all areas of the office have air distribution. Are there any dead spots?. I think we're going to look at whether existing air handling units can support additional filtration beyond where they're at right now. And then I think we're going to be looking at, can we apply things like UV lighting to sterilize the airflow? Can we employ things like bipolar ionization within the airstream to sterilize the airstream? Ionized hydrogen peroxide has onto the market that can be independent of the air handling system. There are devices that we can just hang on the wall to deliver these ions to the space, to clean the surfaces, to sterilize the air. There are many, many things out there that I think we can apply without spending a lot of money to make the space safer on a broader scale.

Host:

There's been a lot of talk that one of the impacts of the pandemic will be that the downtown business districts will shrink and the offices will move to the suburbs where there's less density. What is Stantec's view on that?

Shilling:

We're not seeing that. We're seeing that companies are still going to make the decision on where they want to locate their offices based upon serving their clients and where it makes the most sense for their office to be. I think what you're going to see is the opportunity for employees to choose whether to go into the office more or less independent of where the office happens to be located.

Shilling:

We are not seeing companies changing their business approach. Some of them are hub and spoke where the hub is within the city and the spokes are into the suburbs. Some, some companies choose to do work in the suburbs. That's where their clients are and where they interact. I don't think the specific office location is necessarily going to change. I think it's going to be focused on the ability to give their workforce the opportunity to say, "I'm going to be there all the time," or "I'm not going to be there all the time." And part of that is attracting new talent. The new generation of employees is going to demand the flexibility to say, "I'm going to work from home" or "I'm going to come into the office." And I think that's where companies will find success, in not necessarily changing the office location, but changing what they're asking their employees to do.

Host:

Great. That gives us some good insight into the office market. I appreciate your taking the time to speak with us.

Shilling:

I appreciate it. Thank you for having me.