The global shift to remote work has been one of the pandemic’s greatest and most unexpected consequences, especially for the commercial real estate industry. Eighty-eight percent of organizations closed their doors and adopted work-from-home measures at some point during 2020, and gross office leasing in Q4 was heavily subdued with a more than 47% drop-off in transaction activity.
Our collective social distancing measures have likely changed how and where we work forever. With the newly approved vaccines, though, many companies are planning to reopen their doors as soon as Q2 of this year, leaving many to wonder how to get employees to come back into the office.
To try and answer this question, Clever Real Estate (where, full disclosure, I serve as CEO) surveyed 1,000 remote and in-office workers to get their thoughts on returning to the workplace and their desires related to office settings. Not only did nearly two-thirds of respondents say they preferred working remotely to a traditional in-person setting, but nearly 30% also said they plan to continue working remotely after the pandemic is over.
While this may be alarming to CRE owners with a commercial office for rent, there is also evidence that people are missing in-person, human interaction. Envoy’s latest Protecting the Workplace report revealed that nearly three-quarters of U.S. employees “fear a return to the workplace,” but also found that 94% of U.S. employees would like to go back to the office at least part of the time.
Keeping the current state of the industry in mind, below are some ways in which companies and builders can encourage employees to return to the office.
According to the Clever Real Estate worker survey, respondents felt some of the biggest benefits of working from home include flexibility and saving time by eliminating their commute. Half of the respondents also said they enjoy spending more time with the people they live with, and 43% like being able to sleep in.
These results speak to the fact that working from home has offered more of a work-life balance. There are certain things, however, that people miss about working in an office. A study done by Steelcase of more than 32,000 workers across 10 countries (including the U.S.) revealed that isolation was the largest concern for employees, and the top reasons people wanted to return to the office were to connect with colleagues and reconnect to the organization’s shared purpose.
Humans are social creatures, and we crave interaction with others. It’s how we learn and forge meaningful connections, so it’s no surprise that people would simultaneously enjoy the increased time they get to spend with their loved ones while also missing face-to-face time with their professional colleagues.
Companies can easily accommodate their employees’ needs by offering flex workspaces or flex work hours. Now that the majority of businesses are set up to work from anywhere, allowing employees to choose when and why they go into the office could provide both the flexible and collaborative environment they are seeking. Moreover, these setups can also help businesses reduce annual real estate costs by downsizing to a small office rental space or switching to a shared coworking space.
A big reason that people do not want to return to the office is that they are fearful of the potential health risks and possible exposure to the virus.
According to the Clever survey, just 24% of those currently working in an office reported feeling “safe,” and 46% said it provokes worries about their health. Remote workers are even more concerned about returning to an office, with only 17% saying they would feel safe and nearly 60% reporting worries about their health.
That said, more than 80% of remote workers would feel more comfortable returning to the office if certain precautions were taken, including:
● Mask requirements
● Easy access to sanitizer
● Daily office deep cleanings
● Socially distanced desks
● AC sanitation systems
● Weekly coronavirus testing
In addition, 34% of workers say their company should require vaccines for employees before returning to the office.
Making sure that your locations are as safe and clean as possible will help employees feel better about returning to in-person work.
Employers that do require their teams to go back into the office should consider working with a commercial real estate attorney to ensure their building meets safety codes and minimizes their workers’ exposure to COVID-19 variants.
In addition to implementing safety measures, companies are now looking to lease an office that caters to a flexible and productive work environment. Therefore, commercial office builders will have to think outside of the box when it comes to design.
The previously mentioned Steelcase study revealed that the top three things people want in an office environment are:
- To effectively collaborate with colleagues
- Easier access to tools and resources
- The ability to focus
This means the CRE industry’s approach to design should change, and employers need to create settings that are easily adaptable to changes with multi-purpose spaces and furnishings that allow for a variety of layouts.
Essentially, employees want to be able to easily switch between group and solo work in both physical and digital environments.
Amenities With Value
To attract employees back into a physical space, employers will have to make sure their amenities and perks stand out — and I don’t just mean adding a foosball table or a vending machine. When considering what employees will actually find valuable, we should take a look at the reasons people enjoy working remotely to figure out where the gaps are in their in-office experience.
In Clever’s survey of workers, respondents said some of the biggest perks of working from home included:
- Saving money
- Spending more time with loved ones and pets
- Getting more breaks during the workday
- Developing healthier habits
These preferences can be accommodated in office buildings with amenities such as affordable on-site dining options, on-site daycares, pet-friendly spaces, proximity to lunch spots and entertainment areas, and on-site gyms.
Moreover, people are craving human interaction and a sense of shared purpose. Instead of requiring employees to come in just for work, companies can use multi-purpose spaces to host events for professional development opportunities, networking and team building.
The reality is that office spaces have probably permanently changed. Cisco’s Global Workforce Survey revealed that 53% of larger organizations plan to scale down office size after the pandemic, and Deloitte’s 2021 CRE industry outlook shows that prices for office space are in decline (particularly in expensive markets in the Northeast, California, and Texas).
Although there is not currently a need for office buildings for rent per se, there are other sectors within the CRE industry that have seen increased demand since the start of the pandemic. For instance, low mortgage rates, high buyer demand, and low home inventory has spurred a huge need for multi-family housing throughout the nation.
Moreover, according to CBRE research, there is also enormous demand for industrial space being driven by the rapid increase in e-commerce. While business office rentals may be declining, nearly 80% of U.S. industrial markets are expected to see positive rent growth over the next year as more companies search for warehouses and fulfilment centers.
There are also passive investment options for those who do not want to purchase physical property, such as crowdfunding apps and REITs. As more services have become virtual, a whole world of digital investment tools (from Realty Mogul to Robinhood) have boomed in popularity, making investing in commercial real estate more accessible than ever before.
Trying to get employees to work the way they did prior to the pandemic will likely not succeed. However, there is clearly a desire to go back to an in-person work setting in some capacity. Instead of fighting the changes brought about by the pandemic, employers should listen to their teams and implement policies that take advantage of the benefits of both remote and in-person work.
Commercial real estate investors can only entice companies and workers back to their office if they meet their needs and keep them safe.
Ben Mizes is the Co-Founder and CEO at Clever Real Estate, the nation’s leading real estate education platform for home buyers, sellers, and investors.