By Meghan Hall
Pre-pandemic, one of the greatest lures for tenants and employees were office amenities, so much so that in many cases they were a point of pride. While work from home is still in full swing for many companies around the country and access to the office—and those coveted perks—remains limited, Colliers International predicts that office and company amenities will continue to play a pivotal role in tenant and employee retention.
“[The report is] mostly trying to seek some clarity through the noise that everyone in and out of the industry was prognosticating about what the future of the office looked like,” explained Colliers International Research Manager Jacob Pavlik. “I think when we first started work from home, there was this idea that the office was dead, or that the industry would be forever changed and impacted. And it just didn’t seem to me like that was the full story.”
According to Colliers, brokers across the industry are beginning to see some cracks in the work from home model: both employers and employees are beginning to feel the itch to come back to the office. For the commercial real estate industry and office sector, this is good news. It is not a matter of if tenants will return to their offices, but when.
These sentiments were reflected by brokers across the board, including both tenant and landlord reps, a result which surprised Pavlik.
“Normally when I talk to office brokers, there’s a big difference between a landlord representative and a tenant representative,” said Pavlik. “They have different perspectives and may feel differently on an issue just given the conversations they are in, and their social circles. But here I found it to be quite similar.”
In the future, brokers are expecting that the work from home model will be incorporated into normal business processes as opposed to replacing the office environment all together. A mixed model, in which employees return to the office several days a week and work from home the remaining days, is likely to become more common. In order to balance space needs, companies may even schedule staff to come in on alternating days of the week.
“Most tenants want to maintain their four walls of an office to provide company culture,” stated Bill Cooper, an executive vice president and tenant rep interviewed for Colliers’ report.
“Despite proclamations from some organizations that all employees will be allowed to work from home indefinitely, companies will still want people back in the office in order to create synergistic connections with coworkers, keep networks secure and effectively measure productivity.”
Well-designed amenities, ranging from roof top decks, patios, outdoor recreation and operable windows are all perks that could become increasingly important to office users in the future.
“[The brokers I spoke with] were all going to be recommending more amenities to make employers and people want to come back to the building,” stated Pavlik. “I think it’s a much stronger, more competitive policy to say, “Yeah sure you can work from home, but if you come into the office there’s a litany of amenities [here].”
Amenities that include social interaction will no doubt be the most popular—a point that companies will continue to push in the future under the assumption that being in-office will produce a more productive and collaborative setting.
“The amenities that will remain are the ones that people loved most: the social amenities,” said Pavlik. “As social beings, the reason why we are going back into the office, even if work from home has worked well for us in our particular situation,” is that we are social and we want to be around other people.”
Additionally, companies could increase perks that would make employees more comfortable with working from home. Pavlik noted that Colliers gifted its employees with a membership to Headspace. Employees from Facebook, added Pavlik, were given a two-time payment of $1000 in order to set up their work from home spaces—a way to retain employees and keep them content in an unprecedented situation.
“I thought that was a really cool way to keep employees engaged, motivated and connected,” said Pavlik.
And, as companies evaluate timelines and tactics to get people back into the office, they are also redefining the most important amenity of all: location.
“I think it’s important to consider that location is an amenity in and of itself,” said Pavlik. “The adage of ‘location, location, location’ as the three rules of real estate is something to be said for.”
Employers in the future could begin facilitating a more choice-based working strategy, and tenants are looking at how to transition from a more fixed portfolio to a more flexible, distributed approach to their assets. Both in-office perks and a flexible work policy will allow firms to better compete for talent down the line. Currently, suburban leasing has outpaced urban leasing volume, and while that may not always be the case, more optimized real estate strategies will be here to stay.
“What we can say right now is that suburban leasing volume is greater than downtown leasing volume. And that is, in my opinion, temporary,” said Pavlik. “I think downtown will remain the dominant office market because of the benefits you get being near your competitors, from being near supportive industries, and having access to everything people enjoy about being downtown. That is not going to change.”