The COVID-19 pandemic has had a great impact on commercial real estate and is expected to profoundly shape the future of work. The Building Owners and Managers Association (BOMA) conducted a COVID-19 impact study to find out how commercial space operators and tenants are reacting to the idea of returning to the office. After surveying more than 3,000 commercial office space decision-makers, the results showed optimism around returning to the office while a mix between remote and office work will likely dominate the work scene.
While many tenants believe that the office is vital to successfully conducting a business, 78% according to the study, the chances of employees fully working from the office in the near future remain slim. Survey participants projected, on average, that fewer than half of their employees will work full-time in the office over the next 12-18 months. As Henry Chamberlain, president and COO of BOMA International, said, “COVID-19 has created an inflection point across the commercial real estate landscape, and these study findings show the road ahead is going to pose different challenges and opportunities.” And despite the 65% of respondents who feel the nation has taken a successful approach at managing the pandemic, property owners and operators also need to do their part.
Investment Priorities and Workplace Safety
With this in mind, corporate space owners and operators will have to focus on providing their tenants with the amenities, space designs and building infrastructure needed to ensure a safe, healthy, comfortable and productive work environment for their employees. In fact, 64% of the tenants surveyed believe that owners and operators should make such additional investments in their spaces.
Top 5 Improvements Tenants Expect from Property Managers
Among the top improvements that tenants believe to be important and expect from property managers upon their return to the office, many revolve around physical infrastructure improvements and features and amenities meant to combat COVID-19, all indicating a desire for preventing future threats to ensure a more stable working environment in the long run.
As part of the survey, the majority of respondents considered “additional infrastructure to safeguard against harmful pathogens” to be priority for landlords. These include HVAC and touchless features, all meant to protect and provide safety for tenants, especially given the COVID-19 pandemic. Second, improved shared social spaces and amenities are considered important to accommodate a return to the office space given the long period of time of working from home and lack of social interactions. Also, improved technology connections throughout the building are highly relevant to ensure a comfortable and productive work environment. Furthermore, given the likelihood of landlords embracing a coworking or flex space type of work environment, establishing such amenities for organizations to either scale up or scale down is necessary. Last, but certainly not least, respondents to the survey find that landlords should also focus on offering shared “productivity” areas, such as board rooms, improved to accommodate the pandemic while providing users with the adequate environment to be comfortable and productive.
Must-Have Building Features & Digitalization of the Workplace
Naturally, with technology keeping everyone connected and businesses running efficiently during the pandemic, it is only normal that tenants expect some digital features upon their return to the workplace. Even more so, the majority of these elements are meant to enhance the safety and health of the space. The feature that ranked the highest among the respondents of the survey focuses on providing tenants with touchless features through an office app that allows them to open doors, request elevators and enter and exit parking lots without having to touch the same buttons as other tenants. Also, having an online reservation system for common areas and amenities is important in avoiding large groups of people intersecting while all using the same area. For instance, this allows tenants to know exactly when they can use a common room and avoid the hassle of having to wait in a line until it is freed up.
Another important thing landlords should consider offering their tenants are enhanced service call features, which allow for more efficient maintenance of the workspace. Finally, key fob tracking is important for both tenants and landlords in obtaining relevant occupancy and traffic flow data, allowing both users and owners to understand the best and safest way the office space should be used.
Adapting to a New Future of Work
As 78% of tenants nationwide are considering reassessing their office needs, with 37% indicating they would likely reduce their square footage, the shift from traditional office spaces to coworking and shared spaces is likely to become visible in the work scene. Tenants anticipate shifting towards hybrid workspaces that balance employees’ desires to continue working from home while recognizing they are also looking forward to returning to the office. Fortunately, as maintaining the corporate culture and connectivity among employees remains one of the most relevant issues faced during the pandemic, the 78% of office tenants nationwide that said they feel comfortable receiving a COVID-19 vaccine indicate that returning to the office is likely to be successful as part of a hybrid work plan.
Furthermore, as Robert Teel, senior vice president of global solutions, said, “More than just capturing important sentiments on office space perceptions today, our major goal in this study is to inform industry stakeholders on what lies ahead and how we can all help shape it. From its impact on technology and infrastructure to common spaces and amenities, COVID-19 is an accelerant of ‘the future of the office.’ These survey results reveal what tenants find of greater value moving forward and the importance of collaboration between owners, operators and industry service providers.”
The BOMA International COVID-19 Commercial Real Estate Impact Study was underwritten by a grant from Yardi and developed by Brightline Strategies. This is the second in a series and was fielded March through May 2021 among 3,115 office space decision-makers and high-level influencers from across the United States with respondent oversampling in the top-20 U.S. markets. The first survey was fielded from September through October 2020 among 3,010 office space decision-makers and high-level influencers across similar markets. The data were segmented and analyzed by industry, company size and stage of growth, office square footage, rent rate, renewal date, asset class, location and other key demographic and psychographic tenant characteristics.
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