January 26, 2022
How the Market for Office Spaces is Adapting Post-Pandemic
As we transition into the new year, the commercial real estate industry continues to recover from the hardships of the pandemic. For office spaces specifically, employers are finding ways to balance safety and productivity for their workers while making full use of their leased space. These adjustments will be crucial for the success of the real estate industry in 2022.
With these adaptations in mind, we shift gears to focus on the transition from working from home back to in-office work and hybrid workspaces. This transition creates new norms that many businesses will have to succumb to in order to work most efficiently. Many have predicted that there will be a trend in “downsizing” within commercial real estate spaces as a result.
So what does it mean to work from a hybrid approach? A hybrid workplace is a work environment in which employees are given flexibility and control over where they will work most productively. This is generally a mix of working remotely from home and in-office at an individual’s place of work.
Many companies that are practicing the hybrid model may find it necessary to rethink the amount of square footage they need for their physical office space. This prediction yields a decrease in leasing revenue which would cause a reduction in the market value of certain commercial real estate properties.
On the other hand, there is also still a pool of employers that find office spaces more necessary than ever before. Research has found that 20% of worker productivity decreases when employees are working remotely. It has also been found that communication is more efficient when employees are near each other. Remote work is also said to negatively impact company culture and strategy.
With that being said, there is not less of a demand for office spaces, but rather an increased desire for better and more advanced spaces. Leasing agents will need to repurpose office spaces to be more flexible and modernized to fit the needs of their clients. Agents will need to differentiate themselves by adding different amenities and resources for potential tenants. Ask yourself, “What can I do to increase productivity and sustainability?”.
Some ways to adapt these office spaces include widening hallways, increasing private and individualized offices, larger conference rooms and meeting areas, and creating outdoor workspaces.
In conclusion, every business that occupies office space will have different expectations from their employees and different ideas of how their employees can work most effectively. The best thing to do is keep your spaces up to date and think about what you can include to give your properties a competitive edge when in the market for renting and leasing.
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