TENANT ADVISORY GROUP
Bill Himmelstein | Founder CEO & Managing Broker
With more than twenty years of experience, Bill has completed over $1B in CRE transactions in his career and was named by Crain’s as Chicago’s Top Commercial Real Estate Broker.
COMMERCIAL REAL ESTATE IN THE COVID ERA
The Importance of Office Space
● Ideas are inspired from energy, proximity, and engagement with others
● Face-to-face interactions boost productivity
● Company spaces represent the company culture and identity
“What is the future of office space?”
Office space will remain an important asset for businesses, but due to the current covid reality, our real estate and design strategies need to progressively adapt.
After payroll, commercial space is typically a company’s second-highest expense, yet it is also one of the company’s greatest assets. The culture and identity of a company is first revealed through their employees and secondly through the space that represents them. It is essential for business owners to invest in the core representation of their business. Companies cannot create long-term sustainably nor push effective momentum for their company without a shared home base for their employees and their clients. In continuance of productivity and driving revenue, companies typically consider locating their offices near their workforce, clients, vendors, dining and entertainment. Over the past decade, office space has been used as the tool to attract and retain top talent.
For the sake of accommodations to clients and employees, there has been a major migration the past 10+ years from regional and suburban offices to major urban hubs with access to public transportation, city neighborhoods, arts and cultural centers, and other exciting hospitality. Companies made huge capital investments to demonstrate a long-term commitment to the downtown workplace environment.
The success of the company relies upon its employees and the relationships the employees have with their clients. Personal interaction is essential to maintaining productivity and to living a fulfilling life. In order to create a safe and dynamic environment for employees, companies should maintain and enhance office spaces for their employees. This transition into healthy office spaces will continue to shape the companies’ culture and identity and effectively create deep-rooted business results as well as keep their employees feeling accomplished and motivated. While the study of workplace environment is evolving, some aspects will remain constant: the need for open collaborative space, more private meeting space, and personalized architectural features that highlight the culture and identity of a company.
Technological advancements allow for effective communication through videoconferencing and screen-sharing, but nothing can match the impact of in-person interaction. While we have proven that we have the discipline to make remote environments workable, the loss of a shared culture, collegiality, mentoring and modeling plus the other intrinsic and invisible benefits of an in-person workspace are irreplaceable.
How productive is “productive” when all employees or work functions are one hundred percent remote? In order to regain and move beyond the level of success that was experienced pre-COVID, companies need to produce excellence, maintain & grow corporate culture, onboard new employees and create a competitive edge. How? Enhance in-person office spaces to accommodate our new COVID reality. Staying safe, productive, and flexible has never been more important.
Flexibility is supporting businesses, teams and individuals through the current situation in more ways than one. It is important to not only have a flexible or short-term office lease but also allow flexibility for people; when they work, where they work, and how often they go to an office.
Companies understand the importance of valuing culture, purpose, and lifestyle, yet people are still questioning the future of the office at this point because corporations continue to send out mixed messaging regarding their COVID remote work policies.
Only one year ago, a global social media company said that its new headquarters “allows us to rapidly scale, while preserving our values of collaboration and transparency”, yet announced a year later that its employees could work from home indefinitely.
Companies and employees need to understand that remote work is not the most effective new model for productivity and growth and instead recognize it for what it is: an immediate response to an extreme situation. It is a short-term solution to address the concerns for the health and well- being of employees to minimize the spread of COVID-19. Yet studies continue to show the long- term need for human interaction both at work and socially. It is possible with the innovation of enhanced office space use and safety protocols to make this our new reality.
Many companies have expressed their excitement for their teams to connect with one another at modern collaborative spaces, yet abruptly say, due to this covid era, office space is over. An era is just a period of time. We don’t know when there will be change, but we do know it will happen and that it is always best to be ahead of the game than behind it.
The studies don’t lie; business and ideas are inspired from energy, proximity, and face-to-face interaction which boosts employee productivity.
The solution is in re-imagining the workforce of the future and at the same time reevaluating your space and costs associated with that real estate. It is simply not sustainable to continue to have individual work functions and employees to be in a remote work environment one hundred percent of the time.
There is no doubt this current covid era has sparked a long overdue evaluation of the nine to five, five days a week, at your office desk workweek. Yet, the evaluation about the dynamics and importance of the office space itself is as well overdue.
Owners, developers, tenants, and employees must step back and take a measured look into the future. As we said, ideas are inspired from energy, proximity, and engagement with others. Face- to-face interactions boost productivity. A company office space represents their culture and identity. In-office, flex hours, and a combination of in office and remote work opportunities in the interest of reaching maximum business productivity and establishing long-term company culture and fulfillment regarding the employee and client lifestyle has been and will remain the key to success in business.
Overall, there is a lot we know from past experience and a lot that we don’t know as our future changes. Office space is not dead. One thing that is very clear is that the offices of the future will need to be enhanced to support new health standards in the workplace as hygiene, new effective and collaborative space designs, and the new day-to-day workweek will guide the successful companies of tomorrow.