Many are concerned as to what will happen in a post COVID-19 world for corporate real estate. Corporate office managers and leaders have been struggling to find an answer on how to optimize their portfolio during a time when the workforce has been working from home and their corporate real estate has been left empty for months. Some are looking to renegotiate their leases in hopes to lower their footprint and save on costs, and some are looking for ways to redesign their space or repurpose it. How do you know which option offers the best solution? How do you find the data needed to make the best decision? How can corporate real estate optimize their portfolio post COVID? The answer may not be what you think.
Predictions vs Actuality
As of March nearly half the american workforce are working from home and it’s not clear as to how long it will be until the workforce returns back to the office. Which begs the question, do corporate real estate managers start renegotiating their leases now? Brandon Leitner, a Cresa broker based in San Francisco, expects the corporate real estate (CRE) market to come down anywhere from 10-30%. When looking at the tech giants Twitter and Facebook, who made the announcement their employees will be working remote full time back in May, one can see how these predictions could become reality. Corporate real estate managers are looking for ways to cut down costs and the obvious answer may be to reduce their real estate footprint, considering no one has been in the office for months and they aren’t sure when or if ever workers will be returning. However, the working from home model is not feasible for every worker or every business. According to a U.S working from home survey completed by Gensler Research Institute, only 12% of workers actually want to work from home full time. Shifting to remote work full time, when the role was originally an in office position has created new roadblocks and concerns for employees. Scheduled meetings, socialization and collaboration with team members is hard to achieve when working remotely. According to the same Gensler Research survey, the top 3 reasons why over 70% of workers want to work in the office majority of the week are all based around connecting with their peers in the office. The post COVID-19 office needs to be focused on creating community and connecting people, which is not easily achieved via remote work. With these numbers in mind, reducing your corporate real estate footprint seems to be a short term solution. One could consider keeping the CRE square footage the same but allowing for more square footage per employee and introducing flex workspaces. Another thought could be to consider increasing the CRE footprint to allow for the workforce to return to the office with additional square footage per employee that allows for additional cleaning rooms and services.
Finding the New Normal
Corporate real estate leaders have the opportunity to innovate and develop new CRE strategies, and support business transformation for the ‘new normal’ in the post COVID-19 work world. There isn’t a one size fits all solution as the answer comes down to the needs of the business. However there are questions to ask to better understand what the best solution for your business may be.
- How does work get done?
Most organizations have taken the job roles and business processes and simply moved them to remote work, imitating what was being done in the office. Focus on how the work could be done within your business, and how it could be reconstructed to better serve the new normal.
- What job roles can be reclassified?
Organizations should look at job roles and determine what level of degree they could operate as a remote position. For some, offering a hybrid of fully remote and in-office employees will offer a solution, or offering the employees a hybrid position, only requiring them to be in the office only a handful of times a year could benefit both the employee and the business. - How does the office need to operate?
We all have a preconceived idea of what an office looks like and how it operates. However these traditional ideas need to be discarded to allow for a new transformation in a post COVID-19 workplace. Shared amenities and spaces may no longer fit but offices that allow for larger open concept collaboration spaces that offer employees with face to face time while remaining safely distanced, could be the new office organization.
When looking at your office footprint, CRE leaders need to get creative on how they resize and redesign. The transformation may include any number of flex space, leased space, owned space and co-working space in the CRE portfolio. It is predicted that work completed in main office spaces will reduce by 12%, while work from home will increase to 27% by Mckinsey research. Increased productivity and large savings are offered when these necessary changes are taken into examination. This is a big decision for all CRE leaders, with a large amount at stake. Mckinsey research predicts some organizations will have CRE savings up to 30%, when they take everything in consideration. In order to find clarity in where to move your CRE portfolio and ultimately make a decision for the post covid office, what’s really missing is data.
CRE and Technology
COVID-19 has made it apparent that the corporate real estate industry has fallen behind with technology. As talks about returning to the office have started, the new normal is likely to include the deployment of new health and safety measures, a shift towards multi-use space and a fluctuation in daily use, to name a few. Management is not ready to make such a huge shift, especially without the data to provide a sustainable long term solution. According to Matt Gasner, VP of Engineering and Technology at Carbon Lighthouse, a small percentage of corporate real estate buildings don’t have any type of building management system, and the larger amount that do lack the visibility of accurate and holistic data. When looking at redesigning your office space, not only do you need a full understanding of your space, you also need to understand the needs and wants of your employees. This can be particularly difficult and overwhelming if the data provided is not accurate or not there at all. Corporate real estate leaders need to look for a system that provides them with the data they need, and to fully take advantage of this data, it needs to be realtime and remotely accessible. Insert SaaS (software-as-a-service) technology here. SaaS technology is booming in the real estate industry, SaaS has increased by 21% in revenue in just one year. The benefits of investing in a SaaS technology for a corporate real estate company are much more beneficial and cost efficient to the traditional on-premise systems. SaaS offers low start up costs, easy onboarding for management and employees, automatic updates and accurate, and real time holistic data. With COVID-19 shifting the office culture so drastically, it’s important to find a technology solution that supports the engagement and well being of employees. Many will have concerns and ideas to include in the back to office safety protocols. Arm yourself and your business with the right technology to provide the data necessary to make a sustainable, long term, profitable decision on how to optimise your corporate real estate portfolio.
Many are concerned as to what will happen in a post COVID-19 world for corporate real estate. Corporate office managers and leaders have been struggling to find an answer on how to optimize their portfolio during a time when the workforce has been working from home and their corporate real estate has been left empty for months. Some are looking to renegotiate their leases in hopes to lower their footprint and save on costs, and some are looking for ways to redesign their space or repurpose it. How do you know which option offers the best solution? How do you find the data needed to make the best decision? How can corporate real estate optimize their portfolio post covid? The answer may not be what you think.
Predictions vs Actuality
As of March nearly half the american workforce are working from home and it’s not clear as to how long it will be until the workforce returns back to the office. Which begs the question, do corporate real estate managers start renegotiating their leases now? Brandon Leitner, a Cresa broker based in San Francisco, expects the corporate real estate (CRE) market to come down anywhere from 10-30%. When looking at the tech giants Twitter and Facebook, who made the announcement their employees will be working remote full time back in May, one can see how these predictions could become reality. Corporate real estate managers are looking for ways to cut down costs and the obvious answer may be to reduce their real estate footprint, considering no one has been in the office for months and they aren’t sure when or if ever workers will be returning. However, the working from home model is not feasible for every worker or every business. According to a U.S working from home survey completed by Gensler Research Institute, only 12% of workers actually want to work from home full time. Shifting to remote work full time, when the role was originally an in office position has created new roadblocks and concerns for employees. Scheduled meetings, socialization and collaboration with team members is hard to achieve when working remotely. According to the same Gensler Research survey, the top 3 reasons why over 70% of workers want to work in the office majority of the week are all based around connecting with their peers in the office. The post COVID-19 office needs to be focused on creating community and connecting people, which is not easily achieved via remote work. With these numbers in mind, reducing your corporate real estate footprint seems to be a short term solution. One could consider keeping the CRE square footage the same but allowing for more square footage per employee and introducing flex workspaces. Another thought could be to consider increasing the CRE footprint to allow for the workforce to return to the office with additional square footage per employee that allows for additional cleaning rooms and services.
Finding the New Normal
Corporate real estate leaders have the opportunity to innovate and develop new CRE strategies, and support business transformation for the ‘new normal’ in the post COVID-19 work world. There isn’t a one size fits all solution as the answer comes down to the needs of the business. However there are questions to ask to better understand what the best solution for your business may be.
- How does work get done?
Most organizations have taken the job roles and business processes and simply moved them to remote work, imitating what was being done in the office. Focus on how the work could be done within your business, and how it could be reconstructed to better serve the new normal.
- What job roles can be reclassified?Organizations should look at job roles and determine what level of degree they could operate as a remote position. For some, offering a hybrid of fully remote and in-office employees will offer a solution, or offering the employees a hybrid position, only requiring them to be in the office only a handful of times a year could benefit both the employee and the business.
- How does the office need to operate?We all have a preconceived idea of what an office looks like and how it operates. However these traditional ideas need to be discarded to allow for a new transformation in a post COVID-19 workplace. Shared amenities and spaces may no longer fit but offices that allow for larger open concept collaboration spaces that offer employees with face to face time while remaining safely distanced, could be the new office organization.
When looking at your office footprint, CRE leaders need to get creative on how they resize and redesign. The transformation may include any number of flex space, leased space, owned space and co-working space in the CRE portfolio. It is predicted that work completed in main office spaces will reduce by 12%, while work from home will increase to 27% by Mckinsey research. Increased productivity and large savings are offered when these necessary changes are taken into examination. This is a big decision for all CRE leaders, with a large amount at stake. Mckinsey research predicts some organizations will have CRE savings up to 30%, when they take everything in consideration. In order to find clarity in where to move your CRE portfolio and ultimately make a decision for the post covid office, what’s really missing is data.
CRE and Technology
COVID-19 has made it apparent that the corporate real estate industry has fallen behind with technology. As talks about returning to the office have started, the new normal is likely to include the deployment of new health and safety measures, a shift towards multi-use space and a fluctuation in daily use, to name a few. Management is not ready to make such a huge shift, especially without the data to provide a sustainable long term solution. According to Matt Gasner, VP of Engineering and Technology at Carbon Lighthouse, a small percentage of corporate real estate buildings don’t have any type of building management system, and the larger amount that do lack the visibility of accurate and holistic data. When looking at redesigning your office space, not only do you need a full understanding of your space, you also need to understand the needs and wants of your employees. This can be particularly difficult and overwhelming if the data provided is not accurate or not there at all. Corporate real estate leaders need to look for a system that provides them with the data they need, and to fully take advantage of this data, it needs to be realtime and remotely accessible. Insert SaaS (software-as-a-service) technology here. SaaS technology is booming in the real estate industry, SaaS has increased by 21% in revenue in just one year. The benefits of investing in a SaaS technology for a corporate real estate company are much more beneficial and cost efficient to the traditional on-premise systems. SaaS offers low start up costs, easy onboarding for management and employees, automatic updates and accurate, and real time holistic data. With COVID-19 shifting the office culture so drastically, it’s important to find a technology solution that supports the engagement and well being of employees. Many will have concerns and ideas to include in the back to office safety protocols. Arm yourself and your business with the right technology to provide the data necessary to make a sustainable, long term, profitable decision on how to optimise your corporate real estate portfolio.
