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Some Northeast Ohio corporations on the fence about downsizing office footprints for a post-COVID, work-from-home world

CLEVELAND, Ohio — While executives and business owners continue to grapple with how the coronavirus will affect office life, large companies based in the Cleveland area still maintain it’s too soon to say how the pandemic will impact how much space they use in the future.

Spokespeople from several corporations with headquarters in the area said they either didn’t anticipate downsizing or that it is too early to tell. While the pandemic forced many businesses to close offices in mid-March, it appears such a decision would have to be made farther down the line.

The statements line up with the results of a recent report by the Chicago-based JLL real estate firm that said 23% of surveyed companies based in the Midwest said they will need a lot less space in the future and plan to downsize. “A lot” is defined by a reduction of more than 20%.

The firm surveyed about 130 companies of varying sizes between Des Moines and Pittsburgh, with between 20 and 25 of those being in the Cleveland area, said Andrew Batson, JLL’s senior vice president of research and strategy for the Great Lakes and Midwest regions. Sixty percent of the companies said they consider having some of their employees permanently work remotely, though even more companies said they plan to have at least 80% return to the office once it is safe to do so.

Batson said those thinking of downsizing their office footprint are companies of all sizes and said it is mostly a discussion if they lease, not own, office space or a building. Large corporations that have their own headquarters may not be as inclined to share their building with other companies, he said.

He also noted that most thinking of reducing their space plan to do it in the long term, likely when their lease expires.

The report also said that 47% of companies will need the same amount of office space, while 19% said they will need a little less space.

Overall, the survey shows that it’s not clear how the pandemic will affect whether companies elect to have more employees telework. There have been signs that the pandemic has also led to a recession, which is another reason companies may look to rent less space.

JLL provided quotes from unnamed survey participants that ran the gamut as to what the future holds. Some said the number of people working in their office will shrink while others said nothing replaces the efficiency of having employees together in the same building.

For now, though, some of the area’s largest corporations have no plans, at least in the short term, to change the size of their offices.

Parker Hannifin, a Fortune 500 motion and control technology company, doesn’t “see much of any impact on our real estate either during COVID or post-Covid.” spokesman Aidan Gormley wrote in an email. The company owns more than 20 acres for its headquarters in Mayfield Heights.

A spokeswoman for TravelCenters of America, which owns a 3.85-acre site in Westlake where its headquarters sits, said reducing its office space is a possibility but that executives have not made any such decisions.

“It’s still very early to tell what the new normal will be,” spokeswoman Tina Shaerban Arundel said in an email.

A spokeswoman for manufacturer Eaton, which has headquarters in Beachwood, made a similar statement. However, she noted that the company, which has many employees working remotely also sees the benefits of having employees work in the same place.

“While there’s been a lot of discussion on how the pandemic will result in a reduction of offices, another view is that companies may need more space to effectively socially distance its workforce,” spokeswoman Margaret Hagan said.

A spokesman for Progressive Insurance in Mayfield Village said the majority of its employees won’t return to offices in 2020. He also said the company was “watching and learning from the experiences of other companies to ensure our return to work plans – when they do happen – run as smoothly and safely as possible.”

Finally, a spokeswoman for Sherwin-Williams, whose plans to build its new headquarters in downtown Cleveland were announced one month before the pandemic changed office life in 2020, said she had no update to share on the future of the project.

The paint giant previously laid out its intentions to erect a building west of Public Square and a research and development facility off Interstate 77 in Brecksville. The company employs about 4,400 people in Northeast Ohio and the new facilities’ plans are to hold 3,500 employees, with room to grow.

The spokeswoman, Julie Young, said the company is returning employees to its offices “following a slow and deliberate approach” and that it has no plans to sublease its office space at Landmark Office Towers in Prospect Avenue while employees continue to work from home.

The JLL report also says that 39% of the companies surveyed already reopened their offices and that nearly all of them will be open by the end of the year. At the same time, 40% of companies said they did not expect to have more than half of their employees regularly working there until after 2020.

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