Hybrid work has become the norm for many companies as employees find the freedom of working both remotely and from an office essential in creating work/life balance. Corporate occupiers face the challenge of finding the right office space to serve the company’s needs while also meeting employee expectations. Office attendance five days a week is unlikely to become mandatory, necessitating changes to traditional office space leases. From shorter periods to new space requirements, here are some ways hybrid work has impacted office leases.
Shorter Lease Periods
With hybrid work changing the way employees view the need for in-office attendance, companies have no choice but to keep this in mind when signing new office leases. Remote work remains a main requirement for employees, as flexibility has become an essential request for both employees and jobseekers. However, the lack of human interaction and collaboration has led many to believe that some in-office attendance is necessary to a healthy work environment and productivity.
Many companies have only recently adopted a hybrid working model, though, which has led to uncertainty about finding the best office solution to support such flexibility. With most users not working from the office more than three days a week, the chances of an office space being near full occupancy levels is very low. This means that probably most companies are paying rent and utility costs for a space that is not used enough by its employees to be worth the monthly investment. Shorter lease periods could be an alternative for companies allowing them to try out different office models and office sizes until they find the best solution for the company in the long run. With a proper tool, like Yardi Corom lease management software, companies can easily stay on top of lease expiration dates and even easily compare current and prospective leases to determine which offers the most benefits, both financially and practically speaking.
Reduced Office Space
Another way companies are approaching leases in a hybrid work dynamic is by considering smaller office spaces. With a smaller office footprint, the chances of increasing occupancy rates are higher and the space can feel less empty even with, for example, only 20% of employees present at one time. On the other hand, other companies may find that increasing the office footprint, whether in one location or in the sense of getting multiple smaller locations, may be more helpful in supporting a hybrid work model. This way the company can encourage its employees to work from an office, especially if many are showing interest in doing so, and can even support those employees who may have relocated to a different location during the pandemic. Companies can lease office spaces in various cities across the nation, allowing those who live close to either one of them to work from an office whenever they want to.
Special Office Requests
Another thing companies may consider before signing a new lease is any special requests or requirements they may have. For instance, some companies may require that the office space provide their employees with plenty of conference rooms and shared areas, natural light, open floor set-up and private working stations, game rooms and high-end technology and sanitation and HVAC systems. All these are essential in providing employees with the necessary comfort and safety to make them want to work from the office as opposed to working remotely. Before leasing an office space, companies need to make sure that the space offers all the conditions employees may require and that make them want to embrace hybrid work. And with the help of lease accounting software, companies can ensure that the leases are also compliant.
Flexibility of work has caused many changes and the world of office real estate is no exception. While signing an office lease always required a lot of attention to detail, it now requires additional consideration of what that office space can provide to make employees feel comfortable while working from the office. This is key to ensuring productivity and collaboration in a future where hybrid work is likely to dominate. Fortunately, tools like lease management software can help with any changes and considerations that may arise when choosing a new office space and signing the lease contract.
Yardi Corom is a simple and comprehensive accounting, lease and workplace management solution for CRE tenants. Our cloud-based software solution increases efficiency and accuracy across your entire lease portfolio: manage leases and subleases, track key lease data, centralize transactions and become FASB/GASB/IFRS compliant. To learn more, you can visit our website or schedule a meeting with our team.
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