{"id":1004546438,"date":"2021-01-28T08:13:00","date_gmt":"2021-01-28T16:13:00","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004546438"},"modified":"2022-12-09T02:19:38","modified_gmt":"2022-12-09T10:19:38","slug":"what-to-expect-from-the-office-sector-in-2021","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/what-to-expect-from-the-office-sector-in-2021\/","title":{"rendered":"What to Expect From the Office Sector in 2021"},"content":{"rendered":"
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Greg Martin, Principal, Avison Young. Image courtesy of Avison Young<\/p><\/div>\n

The pandemic acted as a catalyst for change, being the main factor that shaped the office market in 2020. Its multilayered effects resulted in the acceleration and crystallization of several trends. Offices\u2014those traditional clusters of meetings and collaboration\u2014began to change, propelled by the shift to remote work<\/a>.<\/p>\n

\u201cCorporate America was forced to embrace technology and virtual tools to salvage and maintain its core businesses. The investment in work-from-home tools and distance communication and learning sites was forced and realized to be effective in many sectors,\u201d Greg Martin, principal at Avison Young, told Commercial Property Executive<\/em>.<\/p>\n

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READ ALSO:<\/strong>\u00a0Office Deals Falter, Though the Suburbs Fare a Bit Better<\/a><\/p>\n

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However, while this global-scale experiment has shown that productivity can be maintained through remote working, \u201cmany companies are starting to feel that true growth is suffering,\u201d Sanjay Rishi, CEO of JLL Corporate Solutions Americas, further explained.<\/p>\n

Road to recovery<\/strong><\/h2>\n
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Sanjay Rishi, CEO, JLL Corporate Solutions, Americas. Image courtesy of JLL<\/p><\/div>\n

The role of office space users is becoming increasingly important, as they are the ones who need to address changing workforce preferences.<\/p>\n

\u201cWhile the unknowns surrounding the pandemic still make it difficult to predict a precise recovery time, we know from previous downturns that the real estate market typically recovers as the economy is rebuilt,\u201d Rishi noted. He believes a hybrid approach to work and an increased focus on health, well-being and amenities are key to restoring office demand to pre-pandemic levels.<\/p>\n

Martin also points out that confident health-care actions and a back-to-work program employers are comfortable with will lead to economic recovery in 2021. However,\u00a0progress depends on vaccine availability and the vaccination rate.<\/p>\n

But what will the return to office look like? According to Rishi, office reentry will be different for every company. “Even with news of an approved vaccine, we view re-entry as a one-size-fits-one approach that should be a gradual, multiphased and iterative journey\u2014unique for every company.” As a result, hybrid work<\/a> is seen as the new normal, with the model providing office users various spaces suitable to accommodate the full range of workday needs.<\/p>\n

Flex: the new norm<\/strong><\/h2>\n
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Anna Squires Levine, Chief Commercial Officer, Industrious. Image courtesy of Industrious<\/p><\/div>\n

While the office sector as a whole was greatly affected, the flex space subsector hasn\u2019t changed that much<\/a>, with the pandemic accelerating demand for more flexibility.\u00a0According to Anna Squires Levine, chief commercial officer of coworking space operator Industrious, companies were seeking out flexible workplace options long before the pandemic hit.<\/p>\n

\u201cAs more occupiers\u00a0view flex as a release valve\u00a0to accurately meet real-time space needs, landlords understand the need to offer flex to attract and retain long-term tenants,\u201d Hana CEO Andrew Kupiec told\u00a0CPE<\/em>.<\/p>\n

Savills<\/a> and CBRE<\/a>, for example, proved to be one step ahead and created their own flexible space platforms before the pandemic hit. Rishi is convinced that landlords will continue to do the same thing, while corporate occupiers will scale down their footprint in order to adapt to workforce demand and to the new working and living patterns.<\/p>\n

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Andrew Kupiec, CEO, Hana. Image courtesy of Hana<\/p><\/div>\n

Additionally, partnerships formed directly with landlords\u2014something Industrious fully shifted to several years ago\u2014will be key to the subsector’s future. \u201cWhether it\u2019s a matter of bandwidth or expertise, landlords may not always have the capacity to effectively design, market, manage and operate a market-leading coworking space. Outsourcing those operations to experts will become more and more prevalent as building owners look to optimize those assets,\u201d Kupiec said.<\/p>\n

Meanwhile, flex and coworking space providers and operators are contributing to recovery by providing competitive pricing and healthy discounts, multilocation access and business partnerships, according to Workthere Head of the Americas Dom Harding. He expects occupancy to begin to rebound during the first half of 2021. The second half of the year will likely see accelerated demand for flexible office space, resulting from office users\u2019 need to collaborate in person\u2014something that\u2019s difficult to replicate through videoconferencing or other technology.<\/p>\n

Prevention through design<\/strong><\/h2>\n
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Dom Harding, Director, Workthere. Image courtesy of Workthere<\/p><\/div>\n

Employers and landlords have all acknowledged employees\u2019 need for personal exposure and interaction within the corporate setting, so they’re starting to reevaluate their space needs and operation protocols, which is leading to a change in\u00a0office design<\/a>.<\/p>\n

\u201cThe updated design may include various innovation zones, including enclosed and semi-open, with the proper incorporation of technology and advanced audio-visual capabilities. With each employer, the approach is different and the future offices that emerge will mostly be customized for each particular business as it can not be one-size-fits-all,\u201d Hannah Hackathorn, regional principal of design operations at Unispace, told CPE<\/em>.<\/p>\n

New models will likely develop as the\u00a0need for flexibility increases, with many businesses relying on remote or hybrid work models in the post-COVID-19 world, according to Mike Aziz, partner & director of urban design at Cooper Robertson.\u00a0\u201cPeople won\u2019t want to work from home forever and there will be a need for work-friendly third places.\u201d<\/p>\n

And while the office of the future will integrate the latest innovations, Hackathorn finds it essential for designers to educate employees about how safe their new workspace is through signage and\/or in-app messaging, providing employees with the much-needed psychological comfort level.<\/p>\n

From an urban\u00a0design perspective, designers could enhance and broaden transportation infrastructure for people who use alternative transportation modes for commuting, alongside a smart approach to public space. \u201cIt\u2019s critical to recognize that any back-to-office transition will involve changes to the whole urban\u00a0ecosystem,\u201d Aziz added.<\/p>\n

CetraRuddy has already identified heightened interest in mixed-use projects that include office, residential, hospitality and\u00a0retail, all wrapped together into a sort of three-dimensional neighborhood. “It\u2019s a real push for\u00a0meaningful placemaking and a type of office environment where you don\u2019t feel isolated from what\u2019s happening\u00a0around you,\u201d Eugene Flotteron, the company\u2019s principal & director of architecture, said.<\/p>\n

Trends to watch<\/strong><\/h2>\n

In 2021, digital transformation will stand at the heart of every business, fueled by each individual\u2019s interest in health and well-being. JLL found that employees cite work-life balance as more important than securing a comfortable salary, indicating that living consciously and healthily is as important as finding purpose in their job. As the majority of employees are expecting to work from different locations after the crisis, \u201ca dispersed, digitally enabled, liquid workforce will characterize the world of work in 2021 and beyond,\u201d Rishi predicts.<\/p>\n

Martin believes that \u201cready-to-go\u201d space prepared for occupancy on short notice, work-from-home hybrid programs, virtual and digital marketing programs, as well as flexible workspace options are some of the main trends that will dominate the office sector in 2021. Similarly, as changes continue to be implemented, the flex office sector is expected to see an increase in \u201con-demand products allowing access to spaces on short notice for short, daily time periods, through a seamless booking system\u201d, according to Harding.<\/p>\n

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(From left to right) Eugene Flotteron, Hannah Hackathorn, Mike Aziz. Images courtesy of CetraRuddy, Unispace and Cooper Robertson, respectively<\/p><\/div>\n

Another trend to watch is the pivotal shift from a headquarter-focused approach to a decentralized, hub-and-spoke style office model, Levine noted. Companies will look to establish regional offices closer to where employees live in order to avoid long commutes, while keeping in mind that people won\u2019t be expected to go into the office five days a week. Also on the flex office front, Kupiec expects mid-to-large occupiers to continue to ask for more optionality this year, \u201cfrom providing a variety of rent and occupancy structures, including subscription-like models, to creating space designs that are more modular.\u201d<\/p>\n

Design-wise, Flotteron said we\u2019re likely to see office properties with\u00a0larger floor plates, floor-to-ceiling windows and private terraces for individual tenants. \u201cWithin cities, the office\u00a0market may expand more extensively into new neighborhoods as people see the benefits of working closer to\u00a0where they live or having an office space in an area with low-rise or midrise building stock and better access to\u00a0light and air,\u201d he added.<\/p>\n

A new challenge lies ahead: preparing for a new type of demand, where flexibility is key as employees are not fully back in the office yet. According to Kupiec, “no one has the exact answers, nor the occupancy patterns and data, to know how people will interact with office space in a post-COVID-19 world.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

In the fifth installment of our 2021 outlook series, experts from across the office market spectrum share insights on what\u2019s ahead.<\/p>\n","protected":false},"author":741,"featured_media":1004546445,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23891,21742,21747],"tags":[50647,33022,42797,33486,42770,33383,32796,49573],"class_list":["post-1004546438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national","category-latest","category-office","tag-keypredictions","tag-avison-young","tag-cetraruddy-architecture","tag-cooper-robertson","tag-hana","tag-industrious","tag-jll","tag-workthere"],"acf":[],"yoast_head":"\nWhat to Expect From the Office Sector in 2021 - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/what-to-expect-from-the-office-sector-in-2021\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What to Expect From the Office Sector in 2021\" \/>\n<meta property=\"og:description\" content=\"In the fifth installment of our 2021 outlook series, experts from across the office market spectrum share insights on what\u2019s ahead.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/what-to-expect-from-the-office-sector-in-2021\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2021-01-28T16:13:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T10:19:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2021\/08\/the-2021-report-image-CPE-800x510-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"510\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Corina Stef\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-to-expect-from-the-office-sector-in-2021\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/what-to-expect-from-the-office-sector-in-2021\/\",\"name\":\"What to Expect From the Office Sector in 2021 - 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