With 85% of employees saying they prefer to work remotely at least 2-3 days per week, hybrid workplace models are here to stay, but the ramifications of that stretch beyond organizing team meetings and the right communication technology. 

What is the “next normal” when it comes to corporate real estate in the hybrid workplace? 

Though experts see 2022 as the continuation of post-pandemic rebuilding for the real estate industry, the tapestry of the commercial real estate sector will patch together new uses for old buildings. 

Deloitte’s 2022 Commercial Real Estate Outlook predicts businesses will focus on retrofitting properties and repurposing spaces that are seeing decreased usage, enhancing buildings’ sustainability, and refreshing their perspective on making space more people-driven and flexible.

Hybrid work predictions for corporate real estate

1. CRE leaders will focus on repurposing commercial real estate space

Just because a building has been used as an office in the past does not mean its future is as an office. As companies consolidate underutilized real estate, more buildings are becoming vacant – which presents opportunity rather than problems.

Architect and founder of Real Estate of the Future Nikki Greenberg discussed her new initiative regarding repurposing space in a post-pandemic world, AnyPlace WorkPlace. In a Workplace Innovator Podcast episode, she shared her passion for innovating real estate for the future so that there is no underutilized space.

“I don’t think that a space should ever be vacant,” Greenberg said. “It should always be vibrant.”

If homes can morph from places to primarily eat, sleep, and live to become workspaces, yoga studios, and schools, we can reinvent other corporate real estate spaces too. This mindset is emerging in the development of office neighborhoods.

An effective office neighborhood needs more than powerful Wi-Fi, access to various types of conference rooms and workspaces, and mail services.

This available real estate also can be repurposed to fit a larger social need – cutting down on the homeless population and the housing needs overall in larger cities.

In April, the Rand Corporation released a report that shows repurposing underutilized commercial properties, such as hotels, motels, or vacant offices, could provide 9-14% of the housing Los Angeles County needs to produce over the next eight years.

Though it takes effort, planning, and coordination, this adaptive repurposing can lead to long-term benefits to areas from large cities to smaller communities.

2. Corporate real estate leaders will improve sustainability efforts

Environmental, social, and governance (ESG) initiatives continue to rank as high priorities for CRE leaders. As buildings are either adapted for new use or built new, including elements of sustainability and environmental friendliness is imperative.

Sustainable properties play a significant part in creating a better tenant experience, especially when they include emerging technologies (proptech) that focus on ESG. 

More than 75% of survey respondents said their companies will likely expand partnerships with or invest in proptech, including sustainability and risk management software.

3. We’ll see greater flexibility and employee-focused design

Part of making workspaces more people-centric is looking at the primary factors keeping employees working from home rather than in the office. Employees who prefer working remotely cite the ability to balance work with other responsibilities (ie. children or other dependent family members), a healthier work-life balance, and a decreased commute.

During the COVID-19 pandemic, Owl Labs “State of Remote Work” reported employees saved 40 minutes a day not commuting. The JPMorgan Chase 2022 Commercial Real Estate Market Trends points to updating infrastructure to enhance roads and shorten commutes further. These investments in infrastructure benefits commercial properties by making them more accessible, connecting businesses to higher quality amenities, and attracting more talent to areas where people want to work and live.

The U.S. government this year launched initiatives to bolster infrastructure enhancement initiatives. The Infrastructure Investment and Jobs Act, signed into effect in July 2021, floods the economy with $550 billion that partially funds infrastructure improvements, such as roads and bridges for easier commutes, and marks the largest federal investment in public transit ever and passenger rail since the creation of Amtrak. The act will work in tandem with President Biden’s Build Back Better agenda, which promises to add approximately 2 million jobs per year over the course of the decade.

Effective and efficient space utilization continues to pose an issue for companies as they adjust to changing workspace use. With 87% of enterprises implementing hybrid work, according to CBRE, the trends in interior design and real estate are adjusting to fit the idea of flexibility – whatever that looks like for your company.

A hybrid office assumes employees will move more frequently between home and office. Therefore, a hybrid office should provide a seamless experience between working in the office and working elsewhere.

Ramzah Khan works with companies looking for guidance on developing hybrid and collaborative workplaces.

A studio manager at Ware Malcomb in Washington, DC, Khan offers perspectives in the Workplace Innovator Podcast episode “The Psychology Workplace Design and the Evolution of Employee Experience” on how companies can explore a holistic view of office design to create an employee experience where employees feel valued, heard, and supported.

The biggest trend she is seeing is that leaders are approaching workplace design from a people-oriented position as the idea of employee wellbeing takes on a new meaning.

Elements of an employee-focused hybrid office include:

  • A mix of collaborative and private spaces
  • Multipurpose areas employees can use depending on the work they’re doing
  • Furniture that’s easy to reconfigure
  • High-quality conference room technology
  • Technology that makes it easy for employees to find and reserve workspaces anywhere 

The way you physically plan your office space for when employees and clients are in the office can lead to greater productivity and improve the bottom line.  

Architectural Record discussed trends for innovative offices in the hybrid workspace and suggests paying attention to the type of materials you purchase to make the office space flexible. Flooring, for example, can be a key element in creating acoustics to aid, not detract, from work. Materials such as tiles with inherent acoustic properties or carpet with noise-reducing cushion can play a part in helping the functionality of a space filling multiple roles.

Another recommendation is to use the physical space design to give employees a feeling of empowerment. You can achieve this through unassigned desks, lounge-style seating in common areas rather than conference rooms, and rooms sectioned with flooring and furniture to create specific-use areas where employees can choose where they work based on the task. 

This strategic use of furniture and physical elements also play into the continued prevalence of social distancing policies. Physical considerations such as enhanced ventilation help with physical wellness, but more and more businesses also are finding the need to plan space in regard to emotional and mental benefits, as well. 

Learn more about the future of commercial real estate and hybrid work in our resource on managing change in the hybrid workplace.

Tags:  Commercial Real Estate (CRE) Hybrid Workplaces