As Employees Return to Work, Companies Reshaping Offices for Hybrid Plans

As Employees Return to Work, Companies Reshaping Offices for Hybrid Plans

Commercial News » New York City Edition | By Michael Gerrity | May 2, 2022 8:44 AM ET

Based on global property consultant CBRE's new survey of office-using companies reveals that most are back to developing long-term plans to expand or contract their office space now that employees are returning, at least some of the time, after two years of mostly remote work.

By extension, fewer companies are standing pat. Companies planning to maintain the same office portfolios for the next three years fell to just 9 percent in the new survey, down from 27 percent in CBRE's 2021 survey.

CBRE's Spring 2022 Occupier Sentiment Survey includes responses from 185 companies of all sizes with offices in the U.S. The survey results reveal that companies now are at various stages of taking steps to support hybrid work, ranging from changing the size and function of their office portfolios to implementing new in-office technology.

Case in point: Anticipated office-portfolio changes. Thirty-nine percent of companies say they plan to expand their office portfolios over the next three years, mostly due to hiring and business growth. That's up from 29 percent who said in last year's survey that they anticipated expansion.

Conversely, 52 percent of survey respondents say they intend to reduce their office space over the next three years, mostly to eliminate excess space they anticipate will be freed up by remote work and more efficient use. That's up from 44 percent in last year's survey.

Overall, the survey revealed that expanders (10-percentage-point gain) are gaining ground on reducers (8-point gain).

"Companies are moving forward on their real estate plans as their employees gradually return to the office this year, but we need to keep in mind that these types of changes take time to unfold," said Manish Kashyap, CBRE Global President of Advisory & Transaction Services. "Companies will continue to study their new work patterns and experiment with various ways to support productivity and employee satisfaction. The results of those efforts might shift their sentiment on contraction or expansion as we go forward."

One of the primary ways companies are updating their office portfolios to quickly react to changing work practices is by incorporating more flex space. Fifty-one percent of companies surveyed say they anticipate flex space will account for a significant portion of their office portfolios within two years, up from 17 percent that say it already does today. The survey defines "significant" as a tenth to half of a company's office space.

Guidelines for Office Attendance

CBRE's survey found that, similar to last year, most companies plan to allow their employees to spend part of their time in the office and part working remotely. Specifically, 73 percent of companies plan to support such hybrid work. Meanwhile, 19 percent plan to require all work to be done from the office. And only eight percent intend to be "virtual first" or fully remote.

What will that mean for day-to-day office attendance? Eighty-five percent of companies say they want employees to spend half or more of their time in the office. The rest anticipate their workforce being primarily remote, but not fully. This ratio generally fits with the forecast of CBRE economists, who calculate that U.S. workers will spend an average of 3.4 days per workweek in the office going forward, down from 4.4 days a week before the pandemic.

Preferred Office Amenities and Tech

Bringing employees back to the office and enticing them to stay will require more than smart policies. Surveyed companies highlighted the amenities and technology they most want to incorporate in their buildings and offices.

"Hybrid work has greatly expanded the roles the office must play and the needs it must fill," said Julie Whelan, CBRE Global Head of Occupier Research. "Companies and employees alike want their offices to support collaboration through their layout and technology. They want their offices to be clean, healthy environments. And they want to use their space efficiently, which often means sharing it with other employees or even other companies."

Office Wish List

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