CRE 2.0: The Office of the Future

Joe Little

On March 13, 2020, tens of millions of Americans woke up and went to their offices. A week later, that was a distant memory as the COVID-19 pandemic forced companies in every industry to abruptly shutter their doors and switch to a work-from-home model. For more than two years, this was the “new normal” as we all wondered when we would get the green light to return to our pre-pandemic routines. But hopes of a full recovery were dashed as many companies announced plans to continue offering fully and partially remote models even after the threat of COVID subsided. This is forcing owners of commercial buildings to radically rethink every aspect of their business and future proof their buildings to keep vacancy rates low.

The most important thing for property owners and operators to understand is what tenants want. As it turns out, the answer is a lot different than it was before the pandemic. The most important thing is safety. Simply put, companies aren’t going to be able to convince people to come back to work if they don’t feel that their health is being prioritized. Beyond that, tenants want increased space and comfort to support in-person collaboration. And because it is a renters’ market, they are going to push for more amenities and improved building services.

The Safe Office

It’s hard to overstate how reluctant people are about returning to physical offices. According to a recent Bloomberg article, more than half of Americans say that they would actually quit their jobs rather than be forced to come back to work in person. There are factors other than safety in play, of course, but more than 40 percent of American workers still have health related concerns about being in close proximity to their colleagues every day. That’s why property owners need to do whatever it takes to make sure that their office spaces are as safe as possible. This is where the WELL building standard can make a critical difference.

WELL was created in 2014 to recognize buildings that promote the health of tenants, and WELL-certified buildings are designed to take a holistic approach to health for those who work in them. The standard has a number of elements, but in the face of an airborne pathogen like COVID, the most important is air quality.

This can often require upgrades or costly new heating, ventilation, and air conditioning (HVAC) systems. It typically includes high-efficiency particulate air (HEPA) filters, which must remove 99.5 percent of particles like pollen, bacteria, dirt, dust, moisture—and even some viruses. The HVAC system can also include ultraviolet germicidal irradiation (UVGI), which “deactivates” viral, bacterial, and fungal organisms for added protection. The more that buildings can do to improve their internal air quality, the more confidence tenants will have in working there.

If You Build It (Right), They will Come

Safety is an important psychological factor for convincing people to come back to work, but even if people have confidence in virus mitigation measures, they still might not want to return to the office. That’s because working from home is incredibly convenient: after all, who doesn’t love the idea of a one-minute commute and spending the day wearing a comfortable tracksuit? Unfortunately, the majority of American companies are requiring people to actually leave their homes despite significant pushback from the rank-and-file. There is no single way for companies to convince their teams to reconvene in person, but buildings that go out of their way to be as welcoming as possible are going to have a better shot at attracting and retaining commercial tenants.

One of the biggest changes is in how offices are going to be used. The traditional workspace includes private offices and workstations where employees spend five days a week doing their jobs. That’s not going to fly moving forward, especially in companies where people are only required to show up two or three days a week. Instead, commercial buildings need to create common spaces where people can collaborate in teams. This is where property companies are going to need to get creative so they can balance multiple needs that may seem at odds with each other.

One of the biggest needs for office is moving forward is the availability of collaboration spaces. This is fundamentally different than the open-concept office because unlike in traditional layouts, individual employees don’t have a set physical space of their own. It is also different than having a large number of conference rooms, because people aren’t just looking to sit around long tables and chart their ideas out on whiteboards. One thing that is critical to remember is that because so many companies are going to be offering “hoteling” options, in which people only come into the office occasionally, a team that meets on Monday is going to be almost completely different than a group that meets in the same space on Thursday. In this context, flexibility and adaptability are key to success.

After two years of physical distancing, it should be expected that many workers who have to come in every day will demand increased spacing between workstations. Redesigned areas should incorporate this, with at least six feet between desks. These offices may require fewer workstations because some staff might work remotely. However, this would also require a hot desk system. Having several small boardrooms available throughout the space can increase workers’ privacy for one-on-one discussions or making personal phone calls.

Many experts see new offices using a minimalist design that removes clutter and allows staff to focus on work. This will also enable multi-functional spaces that give the work environment added flexibility. As a bonus, these layouts are easier to clean because they have fewer surfaces.

Public (or Amenity) Spaces

No matter how well designed an office is, the building has a hole also has to be welcoming. No one is going to want to walk through a poorly ventilated lobby or stand in crowded elevators just to get to their workplaces. They also aren’t going to want to be stuffed into a cafeteria in the basement during their lunch breaks or restricted to a small strip of sidewalk if they want fresh air. Forward thinking property companies are fundamentally rethinking common spaces to include elements such as outdoor terraces, well-ventilated on-site coffee bars and restaurants, and fitness centers that allow for social distancing. Buildings that are currently under construction or are in the planning stages are already factoring these in, but the good news is that existing buildings can be modified to offer these kinds of services and amenities. Building designs can also be altered to accommodate fitness, comfort, and mind by adding exercise and meditation space and the ability to control or mitigate sound, temperature, and lighting in common areas.

The return to offices is already in full swing, but it has been an uneven process. Back in October and November 2021, people were openly talking about the end of the pandemic, and dozens of major companies reopened their offices with the anticipation that things will return to the way they were before anyone had ever heard of COVID-19. Then the omicron variant hit, and most of those organizations had to quickly reverse course. Experts predict that coronavirus will be around for years to come, and it is not out of the realm of possibility that we will go through multiple waves of the disease, and that all of them will affect how people work.

This uncertainty is affecting every segment of the economy, a few more as acutely as the commercial real estate market. By offering spaces that can accommodate workers while offering several WELL building concepts can make the return more appealing, especially to workers who are hesitant to come back to the office. Commercial property managers will need to consider these factors to serve their clients best and ensure they continue to have high tenancy rates.

Joe Little is a director at Linesight located in the New York office, where he is managing a team focused on cost management for a multi-billion-dollar commercial real estate construction project. Little, an Ireland native, has more than 18 years of experience in the industry in Europe, the UK and the U.S., holds a BSc in Quantity Surveying from the Technological University Dublin and is a Member of the Royal Institution of Chartered Surveyors (MRICS).