After years of growth, the accounting firm Wiss was ready for the final step in its transformation: a new headquarters. The grand opening party was in February.
“We were so excited. All of a sudden, we go from a tired space to this brand-new space — high ceilings, open, airy,” recalled managing partner Paul Peterson, CPA.
And then came the lockdown. Wiss immediately shifted to a mostly remote model for its nearly 230 employees. The new, 45,000-square-foot headquarters in Florham Park, N.J., sat all but empty, as did satellites in Manhattan and nearby Flemington, N.J.
“We couldn’t have been higher. And then, ‘Bang!’” Peterson said. “It was kind of like an awakening.”
Seven months on, Peterson can laugh about it — but he doesn’t have any regrets about the move. Wiss may try to negotiate a rent reduction, but it has no plans to slash office space, a common theme for finance leaders across the United States. About 77% of respondents to the third-quarter AICPA Business and Industry Economic Outlook Survey said they planned to keep their office square footage. Only about 18% planned a reduction, despite the potential savings.
“What I’m seeing personally, with clients and with ourselves, is that we’re status quo. We’re staying where we are. We certainly aren’t taking on any space, but we aren’t giving any back,” said Rebecca Machinga, CPA, CGMA, practice leader for Withum’s real estate services practice in Princeton, N.J. “Real estate’s not the fastest moving industry. If you’re entering a lease or building out a property, none of that happens in the snap of a finger.”
Even so, longer-term changes are in the works. The crisis has showed Peterson and other finance executives the full possibilities of remote work, and many now are planning for longer-term changes to their company structure and the office itself.
“It’s a blessing that we have all this space, but it’s definitely going to be different than what we were intending,” Peterson said.
He believes that his company will stay in a hybrid model that combines in-person and remote work, permanently lowering the number of people in the office. He’s looking now to give employees more space and to convert other areas for community events and recreation.
Louisville-based ARGI faces similar questions as it manages a cultural shift. The firm moved into a new office in February 2019, its latest expansion to accommodate a growing workforce.
“Kind of like a hermit crab, we’ve been going to bigger and bigger shells,” said Neil Quinlan, ARGI’s president.
Before the pandemic, the company was essentially “anti-work-from-home,” Quinlan said. But as the lockdown dragged on, he realized that the hybrid model really works. He anticipates that a rotating remote schedule could reduce in-person headcount by 20% on any given day, even after the pandemic ends.
Quinlan briefly considered whether the company should return to its previous, smaller office to capitalize on that change. But the financials didn’t figure, and he wanted to leave plenty of space to receive consumer clients.
“They want to come in. They want to see people. They like that interaction,” he said.
For now, the company has added barriers between cubicles and spaced out work areas. But the long-term changes could include investing in a multimedia center to produce digital video — a strategy the company embraced during the lockdown.
The media center “had been on our dream list, but it really hadn’t been a high priority,” he said.
Peterson said the pandemic was an invitation to reimagine Wiss’s offices. “Are there ways in which you can almost justify higher expenses if it allows you to create the type of community that you want, to build your culture?” he said.
A few executives want to take the savings instead. Among the 18% of survey respondents planning a reduction, the vast majority said the shift to remote operations was the reason.
Blake Christian, CPA, a tax partner with HCVT, has been involved in preliminary discussions regarding the long-term needs of the firm’s 13 offices. He runs a small Park City, Utah, satellite of the California-based company, which has nearly 700 employees.
“Most of the staff aren’t chomping at the bit to get back in the office. They’re pretty happy working from home,” he said.
The firm’s management committee is evaluating future facility needs but is not anticipating a significant scale-back in its current 175,000 square feet of office space — partly due to strong growth — even with the impact of COVID-19. Christian anticipates a more dramatic reduction in firm footprints as the pandemic extends into 2021. He thinks that midsize firms will soon follow the largest firms to embrace hoteling, a technique that allows employees to temporarily book desks, allowing a reduction and redistribution of office space.
Eventually, those shifts could materialize in the office real estate market, but Machinga said that there aren’t clear, long-term signals yet. She’s watching for changes in sale prices for properties, along with more subtle signs like investments in HVAC systems, which could indicate a stronger return to the office.
“This office environment is going to remain pretty unstable for a couple years — possibly a five-year period of getting the office market stabilized,” she said.
In the meantime, companies are trying to adapt their old spaces to their new ways of life.
— Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Neil Amato, a JofA senior editor, at Neil.Amato@aicpa-cima.com.