San Francisco will allow some workers to return to their offices on June 15, but businesses aren’t rushing back as the coronavirus continues to be a threat.
A downtown where skyscrapers, restaurants and BART stations were packed at the beginning of the year will likely remain desolate as some of the city’s largest employers keep workers home. Companies are also delaying returns to campuses in Silicon Valley and the East Bay.
Salesforce, San Francisco’s largest private employer with over 9,000 local workers, said it didn’t have an update on when its headquarters will reopen. The company plans to have mandatory face masks, temperature checks and 6-foot separation when workers return.
Wells Fargo, which has 14,500 Bay Area employees, will keep most office workers home until at least June 30, though some retail branches will reopen in June. “We do not yet know when our business-as-usual activities will resume. We are creating a thoughtful, phased plan for returning to the workplace, and we will use guidance from health experts to maintain a safe workplace for all employees,” said Ruben Pulido, a bank spokesman.
Google will start reopening offices beginning July 6 with around 10% occupancy, CEO Sundar Pichai wrote in a blog post last week. In September, occupancy will rise to 30%. Bay Area offices are included in the plan, a spokesman said.
Facebook’s offices also won’t reopen until July 6 at the earliest. Salesforce, Facebook and Google are all allowing most employees to work from home for the remainder of the year.
“Returning people to a physical office setting will happen slowly and in stages,” said Carl Guardino, CEO of the Silicon Valley Leadership Group. “No self-respecting employer would put employees at risk.”
The business group’s frequent surveys of members show that they’re overwhelmingly still encouraging employees to work from home.
The scarcity of office workers will likely extend pain for retailers and restaurants that depend on downtown foot traffic. Specialty’s, whose generously sized cookies and sandwiches were a mainstay of corporate lunches, said last month it was closing the Pleasanton chain’s 50 locations permanently due to the virus.
San Francisco officials are also encouraging businesses to be cautious. Employees who are “necessary for operations” can return to offices, but Gloria Chan, a city spokeswoman, said those who could work remotely should continue to do so. More guidelines will be released this month, she said.
Without clear guidelines from health authorities, many offices are not ready to think about reopening, said Jay Cheng, public policy director at the San Francisco Chamber of Commerce.
“We haven’t heard from a lot of folks who are planning to really reopen offices on June 15,” he said. “The city hasn’t released strong regulations on what office reopening looks like, so we’re kind of stabbing in the dark until that happens.”
No company wants to be found responsible for helping the coronavirus to spread.
“Businesses are very nervous about reopening without specific procedures and regulations to protect them,” Cheng said. “They are hungry for those very clear regulations because the legal liability is huge if you reopen and you aren’t protected by a document saying you know what you are doing.”
Angela De La Housaye, founder of DLHA Law Group, has about 14 workers split between San Francisco and Walnut Creek. Starting in mid-June, she will have support staff rotate through Walnut Creek with one person in the office daily to receive process servers, deliveries and mail.
Since most of her workers live in the East Bay, she has no plans to reopen the San Francisco office. “Until they have a vaccine, I don’t want them to have to ride BART to work in San Francisco because of potential exposure there,” she said.
Zillow Group, which has about 500 workers in downtown San Francisco, expects to start opening offices this summer “safely and in a measured way,” but told employees they can continue working from home until at least the end of the year. “We want them to have the flexibility to make the decision that’s right for them,” said Dawn Lyon, chief corporate relations officer.
“Especially with tech, I’m not seeing a great rush to return,” said Dan McCoy, a partner at law firm Fenwick West who focuses on employment practices.
It’s unclear how looting and arson during protests over the death of George Floyd might affect reopening plans, since June 15 is still two weeks away.
“People honestly have no idea if the civil unrest will continue for another week,” Cheng said.
The virus has frozen a booming real estate market. Tony Zucker, a Dunhill Partners West real estate broker who works with smaller tenants, said there has been little office leasing activity since around March.
Tenants are hoping to reduce rents on existing leases, but landlords have resisted so far. For new leases, tenants are seeking a clause that will delay rent payments until offices are ready for occupancy with approval from the city, he said.
There are signs that office rents are falling.
At one downtown office that a client is considering, annual rents were in the mid-$60s per square foot before the virus and have now dropped to the high $50s per square foot, Zucker said. He declined to identify the space for client privacy reasons.
“I think there’s no doubt rents are going to go down,” he said. “Tenants are really thinking about how much space they really need.”
Scott Harper, a Colliers International real estate broker who represents landlords, agreed it was “inevitable” that rents would go down, but it was unclear by how much given the scarcity of new leases.
“Fundamentals are still good in the Bay Area,” he said, but the long-standing challenge around commuting has become more complicated with people avoiding public transit.
Last month, California allowed counties to approve office reopenings for workers who cannot work from home, and Marin, San Mateo, Napa, Solano and Sonoma have done so. Contra Costa is set to allow offices to reopen on Wednesday, while Alameda and Santa Clara counties haven’t released a specific date for when offices could reopen.
ServiceNow, a Santa Clara tech company, said only 10% to 15% of its thousands of local workers will initially come in when offices reopen. The company doesn’t have a date for reopening.
“We’re going to take a phased approach, a very conservative approach,” said Pat Wadors, ServiceNow’s chief talent officer. “The decision to work from home was a very easy one and done within minutes. Returning is more complex.”
Architecture firm Skidmore, Owings Merrill, which has about 250 people in downtown San Francisco, said Sept. 8 is the soonest that workers could return.
“It will be a voluntary return to the office,” said Keith Boswell, a partner at SOM. “Our organizing mantra is we want to make sure that employees are safe and that they feel safe.”
Waiting until after Labor Day helps employees with planning and “gives us enough time to see where San Francisco and adjacent counties are going,” he said. The company surveyed all 1,100 employees nationwide to get their input, with many expressing concerns about how they would get to work, for instance.
Meanwhile, landlords are planning a new reality that includes thorough cleaning and temperature checks.
At 101 California, a major downtown tower, masks will be required and elevators will be touchless with occupancy limited to four people, property manager Hines said in a letter to tenants reviewed by The Chronicle. Automatic door openers will be installed by July, and temperature checks will be mandatory for guests and voluntary for employees. The tower has remained open for essential businesses but is preparing for a widespread return, a Hines spokesman said.
The rise of remote work and the potential end of workers crammed into tight workspaces favored by tech startups could reshape the entire office sector.
“I think there will be some fundamental changes,” said Colin Yasukochi, executive director of real estate brokerage CBRE’s Tech Insights Center.