If you have read any article on the #office sector for 2023, you know that the future remains uncertain nearly three years after the pandemic disrupted the industry. According to the latest CommercialEdge office report, 2023 will bring further uncertainty to the office sector as we enter the post-pandemic phase. Although some companies are becoming more aggressive about returning employees to the office, others have fully embraced hybrid and remote work practices.
The uncertainty comes from what we don’t know. We need to see how the continued impact of the post-pandemic era, interest rates, and inflation will impact commercial real estate. These will be the areas that will need constant monitoring.
However, there is quite a lot we know. Just look at the number of articles on the office sector. We understand that the office sector experienced a shift to hybrid work and decreased office utilization during the pandemic. We also know we can expect a surplus of vacant and outdated inventory. Office space per worker will likely reduce by up to 15% from pre-pandemic levels.
We know that many companies are changing management strategies to increase office attendance among employees. The employees’ preference for hybrid work and a desire for better working conditions drives this trend. This change will increase the demand for new and repositioned office assets. To attract workers, offices must be adaptable and offer wellness amenities, technology, user services, and placemaking.
Here is where the opportunities lie. Older and outdated buildings will see an increase in vacancies, but upgraded smaller offices will remain strong. Flexible and on-demand office space will be a hot sector because these spaces are only fully utilized part of the time. The flexible office space has three key components: shorter-term leases, coworking style, design amenities that retain company branding, and multifunctional spaces that can transform from collaborative spaces to individual workstations.
theBrokerList highlights five critical trends for office building features, including:
- Flexible floorplan design and modular furniture: Recently, Anywhere Real Estate Inc. renovated its Madison, NJ headquarters to give each of its brands a dedicated space showcasing their unique values and visual identity while utilizing a mix of individual ‘hoteling’ stations with tech-enabled collaboration spaces, training studios, and event spaces for deepening employee and stakeholder connections. There are no permanent assigned offices.
- Technology: Advanced tech systems are essential for the office sector and should provide solutions that enable people to work better, faster, and smarter. These systems can help employers monitor the energy management of the property, occupancy rates, smart parking solutions, and heating, ventilation, and air conditioning. At the same time, tenants will benefit from the ease of booking meeting rooms, smart lockers, and wayfinding and navigation.
- Sustainability: Employees have gotten used to a relaxed, friendly atmosphere while working from home. Try replacing those incandescent lights with LED lights and adding natural lighting where available; it will make the employees more comfortable and save you money. Add more plants to the office, which will improve your air quality and the health of your employees. energy efficiency
- Outdoor Access: A Texas A&M study showed that unplugging from an office and connecting outside can improve our relationships with others. Outdoor spaces at work can reduce stress, build teams, and spark creativity. For tips and ideas, check out this article.
- Compelling amenities: The key word here is “Compelling.” Employees will no longer settle for a coffee shop or on-site fitness center. What are the amenities that will sway those employees on the fence? Look back at the bullet points one through four.
Now is the time to plan and implement the upgrades your property may need so you can get ahead of the return to the office space. Your employees and your bottom line will be thankful.
Sources:
TheBrokerList.com, 6 Office Trends We’re Watching For 2023
Commercialsearch.com, Office Sector to Continue Shifting in 2023
Commercialsearch.com, What Lies Ahead For The Office Sector in 2023
Forbes.com, Office Market Outlook Optimal Space Utilization Is Key
Highgrove.net, Create Beneficial Outdoor Spaces For Your Employees
