While 2022 may be considered as the Great Office Reopening for some, the reality remains that attending the workplace will be largely optional for most teams, leaving decision makers tasked with navigating the needs of their hybrid workforce. In order to explore and understand the advent of this new blended workplace, Convene recently spoke with a panel of real estate leaders to discuss the trends they’ve been seeing as offices open back up.
The Convene-studio hosted webinar, “Tracking the Return to the Office: A Look at 2021-2022 Office Leasing Trends,” was moderated by Convene Senior Director of Workplace Sales Julia Broder, and featured guests panelists CBRE Senior Vice President of Office Leasing, Dave Cairns, CBRE Executive Vice President, Rocco Laginestra, and Transwestern Executive Vice President, George Vogelei.
This conversation worked to cover a range of topics, including office leases, changing workspace formats, and predictions for what’s in store as more teams return to their offices in 2022. Here are our top takeaways:
What is hybrid? How are clients defining it?
The webinar kicked off with a poll to attendees posing this very question. To those who were asked how often they expected to return to the office on a weekly basis. 50% of attendees planned on going into the office 1-2 days a week, while 31% planned on going in about 3-4 days a week. They described things like collaboration, interaction, community, and connection as top advantages of the physical office, with the webinar panelists echoing this same sentiment.
Dave Cairns, CBRE Executive Vice President broke down workplace practices into three categories: flexible, hybrid, and activity-based. Flexible work defines the ability to work from where and when you like, virtually or in-person, while hybrid describes the process of working within a team across both realms. Hybrid work surrounds the business objectives, and should be inclusive to various teams and initiatives. Activity-based work can describe the manner in how people work, whether that’s through walking meetings, in-person, or in quieter zones for heads-down work. All of these buckets can connect and overlap with each other, and are inherently more flexible together. All panelists agreed that truly understanding the differentiation of these, and how they best align to their companies goals, was key in creating the best workplace strategy for their teams. While a mix of in-person and remote was unanimously used across the board, there was no single silver-bullet that can solve every business’s needs.
How are industries adapting to hybrid work?
Regardless of industry, it was agreed that Covid-19 provided an inflection point for democratization across a vast majority of businesses. Now, industries are molding themselves to put workers first, and are trying new methods to encourage individual productivity as well as a shared culture within their businesses.
Rocco Laginestra from CBRE breaks down the industry trends he’s been seeing in person. The FIRE sector (finance, insurance, real estate) did not experience as much change during Covid as the industries are largely consolidated, he explains. Deals are still very transactional, and require the same type of face-to-face interactions. This likely isn’t going to change, he predicts. The TAMI sector, however, (technology, advertising, media, and information), has always been more inherently flexible, and is exchanging physical space for virtual platforms that encourage more collaboration. With the return of the office, Rocco expects a much higher demand for conference rooms to meet this demand.
Leasing trends and patterns.
With the technological advances that resulted from or were accelerated by the pandemic, physical offices are now expected to be “better than good” to draw people back in-person. George Vogelei from Transwestern pointed out that employers are in beta testing mode, and want to see the numbers before investing in expanding or renovating space. But — but no one’s back in the office. As a result, lease growth in DC is down 50%, and neighborhood buildings, which are closer to decision maker homes and feature more amenities and shorter commute times, are on the rise.
In Canada, Dave shares that the market is around 11% vacancy, with a largely sublease format focusing on amenities and physical incentives. He mentions that models like Convene are the solution to real estate leasing in the future, as Convene is a full stack merger real estate product that offers events, conference space, and flex offices with better utilization rates long term. Most board rooms are only booked for 3% out of their 10-year lease term, and Convene spaces would offer much higher utilization rates, while offering a full-suite of amenities such as food and beverage, fitness, conference centers, and of course, events.
With the shift to hybrid work, how do you think this will affect the future of the flex office industry?
All of the panelists readily agreed that hybrid is here to stay. Now, companies need to focus on how they implement their hybrid structures in order to attract and retain top talent. David mentions that he’s seen companies focus on activity-based spaces for workers over desk counts. Instead of desks, the office is being transformed to accommodate congregation, celebration, and interaction. As offices in Toronto become more service-oriented, companies are less worried about work produced within the office, but the culture that being together promotes.
To add to David’s point, Rocco advises to look at changes in a strategic and timely manner. Delta threw a wrench into office reopening plans over the summer, affecting deals that were made too soon before restrictions had the chance to lift. Though we can predict what we think may happen next year, it’s still important to look at things 30 days out, and to consider all of the variables that can change within that timeframe.
Overall, we’re seeing a shift in attitudes when it comes to what the office means to companies, contractors, and employees. Gone are the days of five-day, eight-hour workdays (for many), and in are the days of intentional schedules and flexible workspaces. Employees now need to be wooed back to the office on their own volition, and companies are taking note as they plan for reopening.
Tune in to the full conversation here.
With platforms like Convene, all of these solutions are available in one stop, with physical and virtual packages available across dozens of locations. If you’d like to learn more about Convene Workplace or speak with a Convene member to learn more visit our website at convene.com or reach out to us here.