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Coronavirus impact: Future of office expansion projects uncertain as employees continue working from home

ByDavid Louie KGO logo

Thursday, May 14, 2020

Future of big office projects change as employees continue working from home

Construction sites across Silicon Valley are coming back to life with modifications to build large office complexes as workers are expected to return, but the shift to working from home has prompted a re-evaluation of the need for them.

SANTA CLARA COUNTY, Calif. (KGO) -- The sound of heavy construction activity is returning in Silicon Valley after health orders stopped work in mid-March.

Over the weeks that followed, thought has gone into ways to make major office projects better suited for changes in how we work.

Construction sites across Silicon Valley are coming back to life with modifications to restrictions. Sky7 was over the site at NASA Ames where Google is building a new complex. And over San Jose where the site of the old Century movie theaters will be transformed into one million square feet of office space.

About 100 out of 150 trades people idled in March are back at work at phase one, called One Santana West.

"There is no more tool sharing on site," said Seth Bland, senior vice president of developer Federal Realty. "Gloves and masks are required onsite. Social distancing protocol in the form of minimum six feet is required onsite."

Even at this stage, design changes are under consideration to make lobbies larger to accommodate social distancing and to provide dedicated terraces and outdoor space to replace dense conference room settings and small break rooms.

Also under consideration - smart elevators that stop only at pre-set floors to minimize people contact.

However, the shift to working from home has also prompted a re-evaluation of the need for large office complexes. Carl Guardino is co-moderator of the recovery roundtable created by San Jose Mayor Sam Liccardo.

"We are already deep in discussions about whether or not as COVID-19 continues and even past COVID-19 whether we need to return to the work arrangements we have," Guardino said.

If there's a surplus of office space, Guardino thinks that will help small start-up's so important to the innovation economy by lowering the cost of leases. On the other hand, developers remain optimistic there's demand for major office projects.

"It's our complete confidence that large office buildings where we can accommodate the new requirements inside those buildings safely and conveniently is still where people still want to invent the next great thing," said Federal Realty's Bland.

Completion of One Santana West is planned for next summer. But it still could face delays if new health directives are issued to stop work. Safety of iron and concrete works, plumbers and other contractors will be the priority.

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