Is it a One-Size-Fits-All return to the office? Nope. According to a recent report in Propmodo, returning employees to the office has never been a one-size-fits-all process. Different parts of the country have had varying return rates during COVID, often defined by local politics and health policies. And even before the pandemic, how employers, workers, and landlords thought of the office was changing.
From Propmodo, Return to the Office Has Never Been One-Size-Fits-All
by Nick Pipitone
The shift to a hybrid, remote, and flexible workplace was starting to happen pre-pandemic, according to Sheila Botting, Principal and President of the Americas, Professional Services at Avison Young, a global commercial real estate firm. When the pandemic hit in early 2020, the trend went into overdrive. “Employees weren’t tied to their desks anymore right before the pandemic,” Botting said. “The average office seat was empty 50 percent of the time pre-pandemic.” Botting explained that many companies were also moving to digital platforms in the years leading up to COVID. Everything went digital when the pandemic hit and the world “woke up,” she explained. Employers and their workers realized the benefits of remote work, some organizations saw profits go up, absenteeism go down, and having a completely remote operation proved possible. But the biggest downside was lack of interaction, which is precisely where the new flex and collaborative office comes in.
Botting said about 85 percent of companies Avison Young surveys say they’re returning to the office in a hybrid fashion. Employees want to flex in and out of the office based on their job requirements. Some companies are trying to mandate four days in the office a week, but they’re getting push back. Many employees have more leverage in the job market than ever before, so returning to the office has been about what companies can do for them, so they want to come back. “Digital natives can work anytime or place, they’re empowered,” Botting said. “Remote work has changed the world, but it hasn’t been all negative. As companies think about the future of the office, they’re asking how do we retain employees in the war for talent?”
Simply irresistible offices
The flight to quality in the office market has been such a dominant theme that, trust me, I’m tired of writing about it. But it’s true. Employees want hybrid work, and if an office is amazing, people will want to visit it. What employees don’t want is the old cubicle mentality and model. The post-pandemic office is now for social interaction, like a social media collab house. Grunt work and other things can be done at home, and today’s workers don’t want to spend 40 hours a week in an office just punching the proverbial clock. Seeing and collaborating with co-workers is one thing employees want, but there’s more to it than that. A late 2021 Gensler survey of 2,364 U.S. office workers revealed the top thing employees want is better indoor air filtration systems.
Many of the top things on the list of employee wants in the Gensler survey related to COVID health and safety, including vaccine and testing requirements, mask requirements, and enhanced cleaning protocols. Surveyed office employees also wanted access to private spaces and more outdoor spaces to work. COVID may be less of a concern than a couple of years ago or even this past winter, but it’s made employees more health-conscious. Offices without these enhanced health and sanitary features could be at a disadvantage in returning to work.
Still, as COVID cases recede nationwide and health restrictions are relaxed, more people seem comfortable being out in public. In Philadelphia, where I live, COVID restrictions have been strict, and masks and vaccine cards were required at restaurants during the Omicron surge. With cases going down, the city has loosened restrictions, and it’s nice to see mask-less people dining out, shopping, and at the parks as the weather warms up.
TripAdvisor predicts that, despite COVID, Americans may travel more in 2022 than 2019, according to a recent report based on search data and surveys. Seventy-three percent of Americans say they feel comfortable dining out at a restaurant, too, which is near the highest the percentage has been since Morning Consult began tracking it in the spring of 2020. Benjamin Breslau, Chief Research Officer, Americas at JLL, believes the same herd mentality that forced the shift to remote-only work because of COVID fears will soon push in the opposite direction. “If you go to the movies or a concert, that’s a commute-worthy experience,” Breslau said. “So, employers have to ask if their office is commute-worthy. The case for coming to the office has to be compelling.”
Employers have to ask if their office is commute-worthy. The case for coming to the office has to be compelling.
State by state
Weekly office visits have picked up rapidly in recent weeks, especially considering how dire things seemed in January when Omicron was at its peak. Avison Young’s Vitality Index shows that weekly visits have jumped by 74 percent in the U.S. and Canada since January 3, 2022 (as of March 14, 2022). Breslau believes we’ll continue to see weekly office visits increase in the next 2 to 3 months unless something happens like a disruptive, new COVID variant. But because of hybrid work, both Breslau and Botting said getting back to pre-pandemic office weekly visits still may be a far way off if it ever happe
The Vitality Index also shows that weekly office visits in the U.S. and Canada are down 64 percent compared to March 2, 2020. But Breslau said that office demand has increased, and the market is recovering well. He said leasing activity is up significantly, net absorption turned positive at the end of 2021, and overall economic growth has helped, too. The office market’s recovery has been uneven, though, because of the flight to quality, with much higher vacancies in lower-quality buildings.
Return to office rates also vary greatly depending on the region. For example, in places like the Sunbelt and Texas, things have felt relatively back to normal for a year now, and Breslau said those regions will lead the charge. Gateway markets and big cities like Chicago and New York have been slower to return, but they’ve gained momentum in recent weeks. Much has been said about San Francisco’s struggling office market, mostly tied to its dependence on remote-friendly tech companies. But more big companies in San Francisco and on the West Coast are pushing at least a partial/hybrid return. Prominent employers in San Fran like Salesforce, Uber, Wells Fargo, and Bank of America have publicly announced plans to return more employees to the office.
The industry composition of a city affects return rates, but the use of mass transit does, too. Botting of Avison Young says not everyone has felt safe using mass transit because of COVID concerns in places like New York, though that’s starting to change. She also noted that rising gas prices may play a role in the upcoming weeks for offices in more car-centric areas like the suburbs. Unleaded gas recently reached a record $4.33 per gallon in the U.S., and energy experts say it could pass $5 per gallon over the summer.
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