Jun 01, 2020
We’re all about to witness a transformation in how and where we work. In the design world, there’s the old idea that oftentimes “the exception becomes the rule.” So, be prepared to see some current practices become more common and widespread, and to see home life alter accordingly.
By 2021, some Covid-19 exceptions will have very much become the rule. Including a transition to more flexible work environments.
But if you’re in commercial real estate, don’t despair! There will be an ongoing need for physical office space—a lot of it. This is especially true for certain industries and business functions. For those in the commercial real estate sector, you’ll need to adjust your business strategies to target those specific industries and companies that will have the greatest need for your wares. If you have the right stuff, they will pay top dollar for it. They have in the past, and they will in the future. Trust me.
If you’re a business owner, depending upon your specific needs, there will likely be a role for the central office as well—the question will be which form will those work environments take.
One of the primary drivers behind corporate (re)location decisions is simple: companies want to attract the best talent and they want to keep it. In addition, employers want to maximize efficiency and productivity and provide an attractive space that will impress clients and inspire their employees. Comfort and ease are big factors here.
To meet these needs, landlords and management companies can’t go wrong by offering the following two essential features, while companies and economic development professionals may want to take note to ensure they can attract top talent and improve the bottom line
An Engaging Environment
The office space of the 2020s will need to be a place where people want to be. It should enjoyable and comfortable to hang around, with amenities and social interaction that can’t be obtained at home.
Design is important, but that doesn’t have to mean a complete overhaul of your old space. Sometimes the right space can be improved enormously by just moving a few walls around and adding a foosball or a pool table along with areas for informal brainstorming and interaction. No, you don’t need to have a playground slide and a nap pod, but do a bit of research and figure out what CEOs in your area want to offer their clients and employees.
And research is important. For instance, open plan offices are big right now—but the tide is actually turning on that front. Companies are looking for something like a cross between communal living, professional-casual atmosphere, and extremely smart functionality. Technology will play a big role in tomorrow’s office as well. Already buildings are designed with sensors to eliminate the need to grab door handles, and remember that not too long ago we actually had to manually flush the toilet or turn knobs to wash our hands. Expect expansion of such “touch-free” environments.
Green space is also important. People like working outside, so make that a consideration as well. In warmer climates, you will see hybrid indoor/outdoor spaces, with balconies or patios for both socializing and for work. In fact, some offices may offer their guests the choice: “Would you like to hold our meeting indoors, or on our patio conference area?”
Altogether, the offices of the future will be easygoing, functional, attractive, and environmentally friendly. People are wanting a place to work that feels nice and cozy, just shy of being homey, but is primarily consistent with a high standard of living and suited to their professional needs.
Vibrant. Walkable. Mixed Use.
So what about outside and around the office space itself—should that matter? Yes.
The neighborhood or district where a business is located has a significant effect on employee satisfaction as well as the talent it can attract. Over the past decade, we’ve seen a strong push for offices to be located within walkable, mixed-use environments that provide everything from coffee shops to restaurants and bars to parks and open space. These districts are often anchored by significant residential uses as well: apartments, condos, and townhomes that offer convenient live/work options for employees. The presence of people living and working within a neighborhood also bolsters its level of activity, making that area more safe, vibrant, and economically resilient.
Hybrid work-life neighborhoods have largely overtaken old tech parks or office parks. The line between professional and personal life, overall, will continue to blur as cities of all sizes become more integrated and robust. Not just a place to spend the day or night, but an environment that has literally all life has to offer.
I can imagine a day in the future in which people will wonder what we ever meant by “working from home” or “work-life balance.” For those who do work from home, it will be even more important to have a number of amenities and activities nearby—imagine spending not just your evenings and weekends at home but all day as well.
Of course, living and working in the same neighborhood does provide some challenges, and doing both from home even more. That means there will still be a need to separate the professional in many instances. The key to this will be to provide proximity and easy access for employees while also affording a certain level of freedom. It’s important that employees are allowed to basically live as they please outside of work hours and not feel that they’re being imposed upon.
Finding the happy medium in novel and compelling ways will be central to successful real estate strategies for tenants and building owners alike.
The Takeaway
The instant transformation to a work-from-home economy has been a bit overstated. Even so, there is little question that a shedding of office space is likely to occur. For sure, the evolution toward a more flexible and quasi-remote work environment with less demand on employee transit will continue and even accelerate.
Retailers and restaurants, who depend on daily traffic to stay in business, must adjust accordingly (and will certainly look to move to areas that provide both daytime and nighttime activity, necessitating residential and office uses within proximity, if not the same building). Municipal leaders, elected officials, planners, and especially economic developers should see these changes as a positive thing, too, especially those whose strategy is focused on the attraction and retention of Class A office tenants. Those Class A tenants who will continue their brick-and-mortar presence want the vibrancy of these mixed-use neighborhoods, anchored by complementary residential and commercial uses. For those areas that do not have enough people living there today, the potential loss of commercial space provides a tremendous opportunity to rezone commercial buildings to allow for more people to live where others once worked.
There are solutions to the expectation of reduction in utilized office space—but wherever you are you will have to do some research and make some hard choices. In my view, some of these changes are things that professionals and elected leaders should have been embracing for years. Perhaps this is the moment when the collective mind opens up to the kind of transformation it always needed: local economies that mix work and pleasure in a more robust and resilient context that attracts top talent and keeps them around.
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