The Future of Office for Financial Services: Continuing COVID Impact—and a Need To Take a Breath

Sensitive transactions make offices a must for financial services firms, but the amount and design of spaces will be impacted for the foreseeable future, says Newmark's James Cooksey.

A version of this story first published in the Fall 2020 edition of the Dallas-Fort Worth Real Estate Review.

No matter what business they’re in, every company has been impacted by COVID-19. That’s required all of them to review their finances—providing opportunities for financial services firms. Still, financial services firms have faced the same office challenges as everyone else, says James Cooksey, vice chairman and president of tenant relations at commercial real estate firm Newmark. That includes reducing headcount as employees work from home, rethinking office space needs, and planning design changes moving forward.

In terms of the economy, NKF’s Garrison Efird, who works alongside Cooksey, added: “There’s been much speculation on the economic recovery and its shape in the context of the COVID-19 pandemic. It’s looking more U-shaped than the hoped-for V shape.”  In addition to economic uncertainty, in terms of job growth/recovery as well as demand across various economic sectors, there continues to be stagnation, he says.

We asked Cooksey how office leasing is looking for financial services in Dallas-Fort Worth as we head into 2021. He shares his outlook and some advice for tenants in this environment: “Breathe and evaluate what’s important.”

Read more in our Q&A.

What opportunities do you see in commercial real estate for financial services firms?

As companies across industries continue to increase focus on managing financial operations in the midst of COVID-19—in terms of cash flow assessments, valuation strategies, and longer-term forecasting—financial services firms have a unique window of opportunity.

How has the pandemic impacted real estate for financial services?

The pandemic has caused companies in all sectors to pause and reassess real estate needs. Many financial services firms have reduced headcounts, as more banking and trading have been completed online and from home offices through the pandemic. Though some financial services companies have traders returning to their headquarters in larger markets, more and more markets will require less in-office staff.

While there will always be demand for office space from financial services firms—due to the sensitive nature of the transactions—the rise of remote work will impact the amount and design of office space for the foreseeable future.

What’s your approach to handling uncertainty in the marketplace?

We tell our clients that information is the best tool, and educated decision-making continues to be the best approach in this economic environment. Though a pre-COVID-19 economy may be some time off, we continue to see signs—especially in Dallas and Texas—of a slowing recession and recovery as the calendar turns to 2021.

What advice do you have for tenants?

My advice for tenants is to breathe and evaluate what is important. The workplace is shifting in some respects while remaining unchanged in others. Assessing and monitoring wider office trends and, most importantly, information that keeps your employees and stakeholders safe, will best equip you to make well-informed decisions.

Are there any new projects in North Texas you’re excited about?

The growth in North Texas is highly beneficial for the economy and for these cities and their residents. As the CBD and Uptown areas continue to grow and tenants excitedly pursue the “next best thing” in office space, projects and developments in the heart of Dallas-Fort Worth always have my attention.

Sandra Engelland contributed to this report.

The story was updated on Jan. 8, 2021, to reflect Newmark Knight Frank’s rebranding to “Newmark” in October 2020. 

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