As companies explore a return to office space, real estate footprints and square footage needs are being reimagined in many ways, first through space configurations. More importantly, firms are examining these needs through the ROI lens, specifically regarding benefits such as workplace amenities — which will look different than pre-pandemic offerings, according to an office insights report by Gensler.
“Architects have created new COVID-friendly space plans. And, policies have changed to include cleanliness, distancing rules, and vaccinated vs. nonvaccinated rules for employees,” says Mary Kay Bier, First Vice President in Kidder Mathews’ San Diego office.
The purpose and value of the workplace continues to play a crucial role in providing collaboration, connection, and the visceral human experience. The future workplace must bring people, place, and technology together to ensure equity for all work modes: hybrid, virtual, or in-person. But just how comfortable are office-goers with the concept of returning to the collaborative work environment? If they are, what style of work is preferred going forward?
“Some people, especially vaccinated, are anxious to get back to work and the camaraderie. Others prefer to continue to work from home with no commute time, parking expense and more flexibility,” says Wendy K. Hill, Vice President in Kidder Mathews’ Portland office. “But, the return to office date keeps getting pushed out, largely due to the Delta Variant at this point. We will have to see what the winter months bring in deciding when companies start mandating some time in the office. I do think we are moving toward a predominately hybrid work model of some sort so employees can continue work/life balance.”
It seems the hybrid work model is appealing to some companies while others are enforcing a more toe-the-line approach to the in-person environment, says Bier. “Some companies may find a hybrid workplace works, yet others will find having their employees in the office is best for business. For the most part, I think people are comfortable going back to office with the correct protocols in place such as cleaning and not going into work if you are sick,” she says. “They may not be rushing back because they like the freedoms they have working from home.”
“While some employees feel comfortable returning to the office at this point, it also depends on the industry,” says Eric Tse, First Vice President and shareholder in Kidder Mathews’ Irvine office. He says some IT support and engineering workers have remained at home. “Some companies are encouraging their employees to come back to the office, but they aren’t enforcing it,” says Tse. “Face masks and social distancing are still encouraged when in the office. I believe that there will be some element of a hybrid workforce, but there is no replacement for the camaraderie and collective knowledge when people band together and work as a unit.”
The Gensler report echoes that sentiment, saying the most valued workplaces are those which prioritize human experience, providing an opportunity to realign real estate with real needs. Design solutions that prioritize human interactions for health, well-being, and collaboration offer the best opportunities to emerge stronger from the pandemic crisis, according to Gensler. Of that list, the key component for in-office work is collaboration, says Gary Guenther, Executive Vice President-shareholder in Kidder Mathews’ Bellevue office. “To date, many companies’ employees are primarily working from home or hybrid at best and taking advantage of employers who are mostly being cautious about mandating a return to office at this point in time. Smaller tech companies seem to be best suited to work from home (WFH), while many professional service firms seem better suited for in-office work mostly due to a lack of collaboration and mentoring,” he says. “Most companies are still being very cautious and waiting to see how the variant and vaccine rates play out. A portion of the workforce will continue to work hybrid, but subject to industry, those who WFH full-time will likely fall behind. Collaboration, culture, and mentoring cannot be effectively done via Zoom.” Bier agrees that “Zoom calls are not ideal and somewhat annoying. You miss a lot of unspoken language that occurs in a face-to-face meeting, causing some negative impact for collaboration and connection between co-workers and clients.”
The discussion of hybrid workspace begs the question: when it comes to previous expansion/growth plans, are companies postponing those plans or forging ahead?
“Companies were delaying plans for expansion and renewals during the first year of COVID and with the onset of the Delta Variant, not knowing what government mandates and the liability they would be facing,” says Bier. “In the last three to six months, this is changing. It is mostly bigger tech companies that are leasing large floorplans in anticipation of employees coming back to the office.” Guenther says some of this is still shaking out, but he is seeing growth in short-term extensions while companies determine longer term plans.
As for the companies that are expanding, some are seeking different space configurations, while others are looking for larger worker spaces. Tse indicates the metrics have indeed changed whereby employers are prioritizing larger conference rooms and common areas for gathering. Moreover, the amount of square foot per employee depends on the business, yet cubicles will grow in size, Bier says.
Design considerations include an emphasis on well-being such as access to the outdoors. Revitalized rooftops are one of the biggest rediscovered opportunities in real estate development. Rather than being an exclusive offering, these spaces are becoming an essential part of any well-positioned office building, according to Gensler. “I think outdoor areas will become amenities tenants look for when leasing new space. It would depend on if you are in 30-story building or a three-story building and balcony space that is available,” says Bier. “Maybe some meetings are held outdoors, i.e., social gatherings happen in the courtyard or on the balcony rather than in the conference room.”
Tse says many office spaces now have connections to outside elements with garage roll-up doors or accordion doors. “This has always been a creative concept, but now it is truly functional and an important aspect to the office environment,” he shares.
When the last face shield, mask, distancing sign, and hand sanitizer are dumpster-bound, many are pondering how the office environment will look in a year. Will some of these redesigns remain long after COVID? “I think we are 80 percent back in the office within a year unless another health catastrophe happens as it did in March 2020,” says Bier. Guenther concurs the workplace will be closer to the previous normal than new normal. “I believe that there will be some redesign and I expect the office environment to come back strong within 12 to 18 months,” says Tse.
One broker believes the redesigns provide lessons learned and are valuable implementations for future pandemics. “I think the redesigns that COVID brought on are here to stay,” says Hill. “COVID had a huge impact, but if we keep many of the programs/designs that were implemented, the next virus may not hit us so hard.”
Contact
GARY BARAGONA
Director of Research
415.229.8925
gary.baragona@kidder.com