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Analysis

A Look Into the Future of the Office Real Estate

By Lorenzo Núñez | Thu, 11/04/2021 - 10:05

Offices saw a dramatic change in 2020 with people moving their workstations home overnight. As companies move back to face-to-face operations, offices will have to adopt newer standards and cater to a different post-pandemic market.

Never before have the masses been forced to leave their offices vacant to adopt a hybrid work environment at the scale we experienced in 2020. However, even before the pandemic, offices were beginning to drift away from traditional desk rows and focusing on collaboration, flexibility and technological innovation. The pandemic was just the drop that tipped the glass for traditional offices as it forced teams to reassess priorities and focus on what matters most. It has also been quite a successful practice to transition to a home-office work environment, said Álvaro Villar, General Manager of WeWork, in expert piece written for MBN.

One of the top findings in PWC’s US remote work survey was that remote work has been an overwhelming success for both employees and employers. There has been a positive attitude regarding this work shift, with 83 percent of employers now saying that the shift to remote work has been successful for their company. However, the return to the office is also looked forward to. PWC also found that employers are expecting to return to the office to some degree very soon. By July 2021, 75 percent of executives anticipated that at least half of office employees would be back in the office. In comparison, 61 percent of employees expected to spend half their time in the office by July.

Organizations are slowly adapting to the offices of the future. The pandemic has brought some changes that were probably needed but not fully explored before. Companies this past year have learned that they may not need to hire full-time, in-office employees. Instead, companies are looking for more contractors who can work when and where they please. They are also relying more on cloud-based services to maintain a team connected from a distance. Whether we wanted it or not, home office is now a reality.

Not everyone is convinced about this, however. “It is important to clarify that what we have experienced is not home office, strictly speaking,” said José Antonio Cheng, Director of Consulting Services at Coldwell Banker Commercial Mexico. "Moving to work from home was not voluntary and without the pandemic, home office would still not be relevant in the country." The fact that there is no set date for the true return to the office space means that offices need to adapt to this new hybrid mode. “A redesign of spaces will be necessary to accommodate smaller teams. At the same time, offices will need more playful and open spaces," says Cheng. Offices will need to be reinvented, with giant headquarters being reworked into smaller offices in key locations that will allow for more impact and relationship-building in the community. So, what are the new trends in office real estate?

Adapting to New Generations

Millennials will soon make up the largest share of the labor market with a projection to become 75 percent of the workforce towards 2025. This new generation prefers to use savings to live experiences rather than to buy a house. They also choose home office and work flexibility over attending an office, said Enrique Suárez Co-founder of MountX Real Estate Capital. It is all about improving the office experience.

The employee experience goes beyond the time spent working, said Villar. “We should feel inspired from the moment we walk through the door. With attention given to small details, a simple journey such as getting a coffee becomes an entirely different experience. Creativity based jobs are heavily influenced by the immediate surrounding environment,” he said. PWC added in their report that newer workplace designs are likely to include improvements to office decoration and an increase in collaborative hubs, including even private offices or quiet spaces in a deliberate move away from cubicles and open floor plans.

Prioritizing Sustainable Wellness

 

Younger generations consider sustainability and environmental impact in all aspects of daily life. They are aware of water and energy consumption in homes and corporate buildings. For them, a responsible project is one worth spending their time and money in. The importance of sustainability in infrastructure cannot be understated, either. Buildings consume vast amounts of energy and in Mexico, buildings tend to have a 40-year life span. Unfortunately, building design in Mexico has proven wanting, which contributes to the “sick building” syndrome. Poorly lit buildings with poor air flow and uncomfortable temperatures, as well as poorly designed office distribution, ultimately affects a user’s sleep, performance and health, as stated by Luis Cuevas, Commercial Director of IACSA, in an interview with MBN.

 

Newer offices will have to integrate HVAC systems that meet new post pandemic standards, with proper air filtering systems and the proper sensors that regulate carbon dioxide levels, said Cuevas. He also mentions that correcting this syndrome allows workers to reach their peak performance. “If you are working in an environment free of carbon dioxide, you no longer feel tired and sleepy even after a big meal. In addition, by installing lighting sensors that constantly scan the active lighting, you can dynamically increase or decrease the light, which helps to reduce eye strain,” he said. All of these improvements allow for a better workflow and optimal employee performance and wellness.

 

New Offices Spaces for New Needs

One of the newer trends arising thanks to newer generations and post-pandemic needs is the necessity for more space. "The demand for square footage has increased as tenants seek to provide sufficient space for their human capital to avoid contagion. If there is one thing the pandemic has demonstrated, it is that human interaction is paramount to developing a healthy organizational climate and fostering creativity," says Alberto Guindi, Vice President of G Group. While it is commonly believed that remote work will change the office real estate forever, Guindi believes that the need for office space will remain as a way to maintain good relations between coworkers. Space needs will now be dictated by the number of workers who will be in the office each day, allowing them to continue being productive while still being in contact with colleagues under safe conditions. A study among 3,000 UK-based remote workers conducted back in March by the platform HowNow showed that more than 67 percent of employees felt disconnected from their colleagues, while nearly half said that this sense of disconnection was having a negative impact on how they viewed their job. In an even more negative note, 32 percent stated that this disconnect is having a negative repercussion on their mental health.

There are still some questions left unanswered in regards to a full return to the office. At the time of writing, the delta variant of COVID-19 is rampant in Mexico although the country is now in yellow in the epidemiological traffic light system. While the rollout of vaccines has boosted to some degree our return to “normality,” uncertainty remains about how to bring employees back safely. Companies like Twitter, Google and Facebook have had to postpone their return to office due to the new delta variant of COVID-19. Back in mid-July, Twitter’s offices in New York and San Francisco were expected to reopen at 50 percent capacity for vaccinated employees that wished to return to the office but after consulting with the CDC and their updated guidelines, the companies made the decision to close their offices and put their office return plans on hold. The return to the office will not be the same. It will involve a major shift in real estate development, with different standards amid an even more demanding market.

 

The data used in this article was sourced from:  
MBN
Photo by:   louisehoffmann83
Lorenzo Núñez Lorenzo Núñez Junior Journalist & Industry Analyst