It’s no secret the emergence of COVID in 2020 has had a lasting effect on all of us. From the individual to the world’s largest corporation, the pandemic forced us to change the way we do things. And it was hard. And some of things will never go back to the way they were before. But that’s not always a bad thing, and the rapid expansion of hybrid work models necessitated by the lockdowns is one of those things.
The mandatory lockdowns of 2020 hit many sectors in commercial real estate hard, and office properties took one of the hardest blows, because working from home was mandatory for several months. As a result, while the commercial property market, and the economy at-large, continue to recover, office buildings and other professional work spaces are undergoing significant transformations and even growth in some areas, to accommodate and anticipate the new normal: hybrid work.
The Old & New of the Hybrid Work Culture
It’s not like hybrid work just came onto the scene; we’ve been headed this way for 20 or so years. But the rapid advancement of remote-communication and network-sharing technologies, coupled with COVID, took hybrid work from something maybe one or two of your friends did to something a big portion of the working population is doing now. And it happened almost overnight.
Now we’re in a space where common workplace culture includes at least a little work-from-home time. Employers like it because they can offload office space and reduce overhead. Employees like it because they’ve got the option of doing their work in privacy in the comfort of their PJs, and hours also tend to be more flexible. The impact on the real estate market is undeniable with people moving across the country to developing new houses or even apartment buildings.
So, is there a place for office buildings anymore? Or are we headed to a mass-exodus that will result in thousands of vacant, derelict commercial buildings throughout the country? The answer isn’t so simple, and it may depend mostly on what owners, buyers and tenants of professional work spaces do next:
How Office Spaces Need to Transform
Things aren’t hopeless for offices – many businesses have realized that total work-from-home setups simply aren’t viable and need to retain or increase in-person workspace following COVID. Amazon and Google are sure there’s a bright future for professional work spaces; they’ve been buying new workplace properties across the country even though they’re also only requiring part-time in-person attendance. Commercial land development and new buildings are booming despite supply shortages.
But what does the new normal for these work environments look like? The commercial real estate industry is still trying to figure it out. About 85% of employees report wanting to work from home for at least 2-3 days a week. But, according to an industry leader, only 10% of office managers feel they’re prepared for a permanent hybrid work culture, and 30% of employees are dissatisfied with their current hybrid work setup. No matter how we look at it, newer office developments will have to change in some way.
The answer to the question of how offices can stay relevant and useful in this new professional culture is user experience, both in regard to the physical environment and the technology. This is a great excuse for businesses to grow both in terms of office space and employee satsifaction. Offices need to become more than sterile rooms filled with cubicles, formal office furniture and conference tables. Those sad break rooms and vending machines full of stale candy don’t make anyone want to leave their house just to attend a couple hours of meetings.
The question becomes; what do owners and property managers of office spaces do to make going to work something employees are satisfied with instead of something they dread?
Provide the right technology
Investing in the right tech is essential to making a hybrid work model function for a business. But as a tenant of an office building, it’s on the owner or manager of the space to make the building functional for the tenant. This is going to require changes in amenities, automated access and monitoring, building security, and any other infrastructure needed to make entry, exit and use of the building simple and streamlined.
To stay competitive in the real estate market, office building owners can keep up with new technology and infrastructure. By embracing emerging options, owners and managers can position their properties as modern spaces. Ones that meet the ever-growing needs of businesses and their employees. This commitment to staying up to date with technology showcases dedication to providing a forward-thinking environment. You can offer great real estate for businesses in the constantly changing and growing landscape of hybrid work models.
Tailor physical spaces for flexibility, collaboration and comfort
Connecting is perhaps more important to workplace culture in a hybrid work situation than when we used to be in-person all the time. New layouts will be required, changes in furniture and amenities, and anything else needed to make your tenant’s time functional and comfortable, so that they can make their employees’ time functional and comfortable as well. Open, collaborative spaces are the new normal for office buildings, and owners of commercial office spaces need to be ready to adjust to that.
Challenges for Managers & Lessors of Office Buildings
We get that creating the optimal hybrid work environment isn’t as simple as requesting some build-to-suit tenant renovations and implementing No-Meeting-Mondays; there are clear challenges ahead:
Hybrid work is hard to introduce.
Businesses need to plan properly, intuitively and flexibly to create a successful model for their specific venture. Owners of office buildings need to be ready for unique, and possibly ongoing, requests from tenants for changes in things like building layout, security, amenities, and access. Pivoting to partially-remote operations is a process for everyone – property owners, managers, employers, and employees. For newer developments, you’ll may want to keep commercial spaces more barebones to allow for tenants to mold the space into their team’s needs.
Hybrid work is more difficult to make equitable for everyone.
Not all employees have the same home or transportation situations, and not all employees have the same access to resources, especially when it comes to expensive tech like workplace laptops and unlimited phone data. Businesses need to implement plans that keep in mind every employee and shape schedules and assignments accordingly. In turn, the building manager needs to work with their tenants to deal with building access and details like climate control and access during odd hours or off days.
Hybrid work culture requires more attentive collaboration
Everyone is split up – at home or on different in-office schedules – it’s easy to become disparate. This is largely the responsibility of the business; they need to put extra effort into creating procedures that keeps their professional culture cohesive and connected. But this will also require collaboration with the owner of the workspace, especially if they’ve got multiple tenants adopting hybrid work.
Entities who own office properties and other professional spaces, then, need to pivot towards much more hands-on relationships with their tenants, and these relationships need to lean more collaborative than hierarchical. New developments should always be built to suit these new needs. More open spaces can save a commercial developer money. Reducing your included furnishing saves money and being open to what the business needs to grow will create a more positive relationship. In the end, it benefits both the company and the owner.
How Hybrid Work is Helping the Workplace Property Market
This new normal also offers new opportunities, namely, flexibility, especially for entities who lease office spaces and other professional work spaces. These hybrid offices are going to require open space, movable furniture, operable walls, and other modular systems to make adaptability easy and inexpensive, especially for tenant changeovers. However, this also means that, once your building’s security, climate infrastructure and hybrid layouts are completed, creating new layouts for new tenants will be easy, quick and inexpensive, because now your building is designed to adapt.
We’re also seeing a huge uptick in complementary businesses sharing the same office suites or buildings. This is perhaps the most attractive change for property owners and managers. These flexibly-made, flexibly-used spaces allow owners to attract a wider variety of tenants, and sometimes more than one tenant per space, meaning less risk of vacancy.
So, you see, it’s not quite as simple as thumbs-up, thumbs-down for whether or not office buildings are here to stay. Hybrid work culture poses just as much opportunity as risk for businesses and commercial real estate investors alike. It’s all about finding the right creative strategies for expanding your venture to allow for the flexibility needed and change coming in the professional sector. Future commercial builds need to take this into account if you want your portfolio to keep improving, but they’re still viable and can grow a business if done right.
If you’re in the market for an office space, or looking to lease a new workplace location, you should partner with a comprehensive real estate development firm with office properties in their portfolio. There’s nothing better during a period of change and uncertainty than knowing you’ve got 360° coverage at each step.