The Trump Administration’s mandate calling for all employees of the federal government to immediately return to the office or face termination was music to the ears of downtown DC landlords, shop owners, restaurants, and assorted stakeholders in the greater DMV region.
But after managing totally remote or hybrid work schedules for nearly five years, are the majority of workers willing to return to the pre-COVID, five-day-per-week, in-office routine or will they leave government employment? Brokers familiar with the Baltimore and DC downtown markets are optimistic the plan will work, but will take time to implement.
KLNB Senior Vice President Harry Dematatis believes the order was “a long time coming” but is worried that unions representing federal workers will delay or hinder any implementation of the plan. He adds that the federal government is determined to make the plan work no matter how long it takes.
“It is anyone’s guess whether 30 or 40 percent of current federal government workforce will choose to not abide by the mandate but, at the very worst, things are moving in the right direction and a precedent has been established,” Dematatis said. “There are sure to be many workers who have been career federal employees and do not want to place their pension at risk. One thing is abundantly clear: Restaurants and shops that provided services to downtown DC employees have suffered greatly and many have been forced to close down their businesses. My prediction is that we will start seeing some movement in the second or third quarter of this year.”
Dematatis makes the case that an in-office workforce promotes synergy, growth and collaboration and helps preserve workplace culture.
“The private sector pivoted to an all-remote environment when COVID first occurred by necessity and, while some head-down tasks can be completed at home, companies quickly realized the disconnect between workers and managers,” he said. “Some companies right-sized their space to reduce expenses, but many more understood that energy and collaboration were missing and yearned for a return to normalcy.”
The impact of federal government employees working remotely is being felt in Baltimore as well, with large outposts such as the Social Security Administration and Centers for Medicare and Medicaid in Woodlawn, remaining largely vacant.
“Expect significant push back,” said Ketch Secor, Senior Vice President for MacKenzie Commercial Real Estate Services. “The federal government doesn’t move quickly and people in general don’t make decisions without proper thought, but I am convinced this plan will bear fruit although everyone needs to practice patience.”
Any positive movement back to the office would have a “profound impact on the commercial office sector which desperately needs some good news these days,” Secor said. “This mandate is a step forward and will also impact affiliated companies, such as furniture and business equipment companies as well as VoIP providers which support office users.”
He expects this situation will play itself out over the next eight to 12 months.