We knew it was a bad time for commercial real estate. We didn’t imagine it was this bad.
Among CEOs, 76% told Fortune their company will need less office space in the future. And 28% say they’ll need a lot less office space. That’s the finding from a Fortune survey of 171 CEOs in collaboration with Deloitte between September 23 to 30.*
If those reductions come to fruition, it could have a big impact on everyone from restaurant owners in central business districts to the financial institutions holding commercial real estate.
CEOs are finding that without a draining commute or office distractions, some employees are thriving from remote work. Among CEOs we surveyed, 40% say virtual working has increased employee productivity.
On the flip side, 31% say it has decreased productivity. Fortune Analytics has found the results are split among age groups, with Gen Z struggling the most to stay productive while working remotely. But so are some of their older colleagues: Many parents are challenged by increased childcare responsibilities at home due to virtual schooling. The employees eager to get back to their desks will be the saving grace for many office buildings.
It’s not quite doomsday, either way: If corporate America does scale back on space, it might turn out to be a modest cutback. Gary Norcross, CEO of Fidelity National Information Services (No. 303 on the Fortune 500), told Fortune that although the new normal will involve more WFH, small satellite offices will be the most likely to go.
*Methodology: Fortune surveyed CEOs in collaboration with Deloitte between September 23 to 30. A total of 171 CEOs responded to the survey, which was sent to Fortune CEO Community. That Fortune CEO Community includes Fortune 1000 CEOs, Global 1000 CEOs, and CEOs who attend Fortune conferences.
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