COVID-19 created a paradigm shift in the way many organizations view office space usage. Across the globe, companies have adopted hybrid-workplace models, while some have closed their physical offices altogether. This means that in the “post-pandemic world”—whenever that is—organizations will need to look at reinventing their office spaces.

Hybrid-work has resulted in numerous companies rethinking their layout and design. What was assumed before but has been made very clear since the onset of the pandemic is that many forms of work can be completed remotely, from anywhere in the world. So, to better accommodate the changing workplace and to keep seats filled, organizations are attempting to reinvent their office space. One topic often debated in the industry is whether open office concepts are finished. Many believe—myself included—that open concepts are not completely dead, especially when it comes to spaces where employees want to collaborate and connect with one another. That said, it is important to avoid over-collaboration when designing an office space. Finding the appropriate balance of shared space versus private workspace will be determined by the company’s industry and the team’s culture. For example, many tech firms will continue to focus on collaborative space while most law firms will prefer their attorneys and paralegals to work in private offices. Amenities such as wireless charging stations and private phone booths will be important for offices with an open layout because they will provide team members the opportunity to have privacy when needed. The hybrid model is likely going to dictate office space utilization in the coming decades and it’s crucial for all organizations to adapt their office design accordingly.

A recent article in the Wall Street Journal titled “The Post-Pandemic Office Should be a Clubhouse” explains that the office space of the future will be a “clubhouse” where employees go to connect with each other and work informally, and the office will become a place for an organization to promote its brand and culture. Employees and workers across generations—including Generation Z, Millennials, Generation X, and even Baby Boomers—feel that the office is a place for team collaboration. Catching up with coworkers and participating in informal meetings is known as “soft work” which the article explains will become the focus of the future office environment, rather than the “hard work” that people usually complete in solitude. The office must be an environment where employees feel engaged, energized, and safe for companies to successfully encourage their workers to happily work from the office once again.

Additionally, a physical office presence is important for the recruitment and retention of new employees. Many young professionals seek mentorship that can be best provided when working in a physical office. Various other professionals who seek to stand out to senior management will also view working in the physical office as a way of differentiating themselves from their peers. The organic and unintentional connections that take place amongst teammates can be difficult to reproduce when working remotely. These are the reasons why “soft work” in addition to the hybrid-work model will dictate the future usage and design of office space.

The ever-changing environment in which we live makes in extremely difficult to predict future office space usage trends. Now more than ever it is important to connect with a local SIOR member to help navigate the shifting office environment. Tenants who work with a Tenant Representative broker will benefit from maximum flexibility in their office lease, which is being achieved through termination options for long-term leases and renewal options for short-term leases. Many brokers are negotiating longer rent abatement periods as well, which provides their clients with more flexibility when settling into a new office. Most office markets are currently experiencing greater supply than demand for office space, so tenants and brokers can take advantage of the downward trend to negotiate favorable leases to some extent.

Landlords who work with qualified leasing teams will benefit from the hands-on knowledge of what deal terms are of most importance to tenants and what building amenities are most attractive to current and prospective future tenants. Fitness centers, rooftop terraces, common collaborative spaces, bike storage rooms, onsite cafes, and concierge services are some of the most desirable amenities for office buildings. Tenants are also more interested than ever in understanding building janitorial specifications. Additionally, landlords are helping provide flexibility for tenants by offering built-out swing space for companies who may experience growth and are still trying to understand what their future space needs will look like.

As we’ve seen with the spread of hybrid- and soft-work models, the next few years is an exciting opportunity for the office sector of commercial real estate to reinvent itself for the better!

Cory LaDuke

SIOR Member Associate

Associate Real Estate Broker, JF Real Estate