By: Jason Braidwood
How people live, work, and play is constantly changing. Navigating these dynamic trends is what makes the real estate and development industries so exciting. It’s no secret that the COVID-19 pandemic will have lasting effects on how we all live, work, and play. The industry is just getting started on how we think ahead and adapt when it comes to fostering a culture while creating a safe and sustainable office environment.
One of the largest considerations when it comes to future office adaptations is how to sustain culture. Behavioral changes will undoubtedly outlive the immediate crisis. Reimagining the workplace is central to corporate life and to the commercial real estate business. Before COVID-19, the commercial office space was trending towards densification and open-plan layouts. While this trend may reverse sharply, how do we keep culture intact when the office has been such an integral part of corporate growth?
One of the largest benefits of remote work over the past several months is an increase in productivity. This is due to many factors, including fewer interruptions, eliminated commutes, and logistical conveniences (e.g., Zoom meetings). Remote work has also shown to increase job satisfaction. Between an increased sense of flexibility, additional time spent with loved ones, and reduced distractions, team members are happier with their jobs, which, in turn, leads to increased productivity.
As we navigate the pandemic and its lasting effects, how inefficient and expensive will it be to maintain two offices – one at home and one at a physical office space, and who will bear that cost? Given a seamless technological environment, to which we come closer to every minute, working from home saves billions on input costs. However, are the cost savings at the expense of culture and growth? What is the middle ground? When everyone is working remotely, you miss that impromptu communication, collaboration, and spontaneous exchange of ideas. This has hampered company cultures all across the country as it is challenging to maintain and foster that human element and collaboration while working remotely.
This pandemic has shed light on the fact that offices are places for connectivity and collaboration, both physically and virtually. The question is what the future of workplaces looks like as an ecosystem with multiple environments and how we will adapt not only our spaces, but our behaviors and industries.
There is no one-size-fits-all solution when it comes to working remotely. Everyone has had to adapt in their own ways to keep themselves, their teams, and their business accountable and productive. Responses will vary depending on industry, company size, and nature of the work. Larger firms will likely rent satellite offices for quick ramp-up and ramp-down while smaller firms may be more comfortable going back to their office full-time. Other will decide to forego an office completely and move to working remotely. However, even within firms, various departments and generations will experience work differently and may have to create their own solution. If working remotely full-time is not an option, hybrid schedules are a great way to control presence in the office. KDG has implemented an A/B schedule where our team members are working five days in the office and five days remotely. These types of schedules reduce density and greatly increase the ability to social distance.
So, what does this mean for the macro environment? While we go to our offices for collaboration, new measures will have us interacting less. Once an effective vaccine is introduced, open collaboration spaces will return to favor as people become more comfortable with building design and workplace protocol. There will also be a great emphasis on health and wellness features for safety, comfort, and productivity. These features can include increasing indoor air quality, indoor / outdoor spaces, and antimicrobial finishes. All of these conditions are known as Indoor Environmental Quality.
Increasing the indoor air quality in your space is a proven method for ensuring safety for all team members. You can update your systems to ensure that infectious particles aren’t floating around your office by upgrading to higher performance models or retrofitting and adding high-tech filters to your current HVAC systems. You can also install antimicrobial, antibacterial UV light sanitation to kill any bacteria that may be living on your surfaces. Outdoor air exchangers are also an option. Increased fresh air intake leads to hotter and colder working environments, so you are able to control temperature and humidity within the office. Much of this technology has been available, but it is just now becoming more relevant and, in some cases, required.
Outdoor, climate-controlled spaces are a great option if collaboration is a large part of your culture. These spaces can be used for meetings and even dining. We will also begin to see new standards and guidelines when it comes to safely utilizing workspaces. There will be occupancy limits, not only for the building itself, but for individual conference rooms and offices. Seating in open areas will be limited with any remaining furniture spaced to ensure six feet of social distancing. There will be different areas for entries and exits in order to decrease the flow of people in an out of the office. Everyone in the office will also have to follow social distancing guidelines. Floorplans and layouts will be vastly different with some design plans including touchless technologies throughout the office.
While it is hard to tell exactly what the future will look like, we do know that all of these factors will affect costs, office design, and location. When it comes to costs, long term leases will suffer along with new construction. Office managers will also have to make compromises and add extra costs to their budgets. For example, introducing increased and stricter cleaning procedures could lead to less security along with removing conveniences such as communal coffee and cafeterias. Office design will shift to smaller footprints with hoteling flexibility, hybrid schedules, and more frequent cleaning measures when turning over spaces. There will be less investment on permanent interior finishes due to shorter lease terms. Much of this investment will go to better designed furniture, fixtures, and equipment (FFE) for team members to take with them and FFE for team members’ home offices. Finally, technology adoption will no longer be an option. With improved systems for video conferencing, cloud computing, general connectivity, and smart building applications, offices will need to adapt and ensure that their technology is up to date to support and maintain a successful business. Locations of offices will also change. The millennial population has already begun to move from dense, urban areas to suburbs. Those submarkets are already under transformation into more live/work/play environments similar to that of an urban area, but with more space and affordability. Health and safety concerns surrounding COVID-19 also play a role in this move to suburban areas. There is less mass public transit and team members will be able to avoid expensive commutes to expensive cities. Suburban areas also allow for smaller buildings. Fear of elevator sharing could lead to non-high-rise environments. It is conceivable that firms will opt for multiple locations in markets where team members have the opportunities to spread out and forgo mass transit and ride sharing commutes.
We see change, even as simple demographic shifts foster. Yes, these changes will be more drastic and long-lasting, but the real estate investment sector will chug along and adapt, as it always does. KDG believes that efficiency wins in the end and flexibility will be values. These two assumptions lend toward a near and medium-term view of shorter lease terms, with team members opting for fewer commutes on fewer days. Traveling for internal meetings – across the town or across the country – will drop significantly. A mild cough or sniffle will keep folks at home in an instant.
Ultimately, team interaction will become more efficient. There will be more time to work. Companies will have more flexibility to grow and contract. These are good things and KDG looks forward to reimagining these spaces together with our partners.
Learn more about KDG here.