The workplace and work patterns will see long-term changes over the next three-to-five years as a result of the pandemic. A new study from Urban Land Institute conducted its first study of workplace patterns in its Future of Work 2020: A global real estate players’ point of view report, which surveyed 555 real estate professionals across the globe to look at the longer term implications of workplace changes as a result of the pandemic.
The survey found that most companies and workers expect that remote work will become a permanent fixture of the workplace model. 96% of respondents to the survey said that employees would continue to work from home, 72% responded that there would be remote work away from the home and 67% of respondents expect increased use of satellite offices. Overall, the majority of respondents believe that 60% of employees will spend at least 40% of their time working remotely. By comparison, before the pandemic, only 20% of office workers spent 20% of their time working remotely.
While workplace strategy will ultimately change, there will still be a need for a physical office, and employees relayed that the office will continue to play an important role in the company culture as well as for talent recruiting and retention. However, there will still be major changes. This includes the reduction of office footprints, expected by 53% of respondents, and increased importance on health and wellness amenities, expected by 94% of respondents.
For owners of office space, this will have several implications. First, there will be an adjustment in the language used, from office to workspaces to cover the full spectrum of the ways that people work. In addition, tenants will likely demand more flexible office footprints, according to 96% of respondents, flexible lease contracts, according to 66% of respondents and more adoption of co-working spaces by large corporate occupiers, according to 60% of respondents.
In terms of lease contracts, other legal experts have also weighed in on the matter, suggesting that several lease provisions will need to change as a result of this event, which has created a gray area between landlord-and-tenant expectations when use of the property is unavailable. This could mean changes to operating expenses, base year calculations, casualty/destruction and rules and regulations as outlined in the lease, according to Andrew Ouvrier, partner at Cox, Castle & Nicholson.
The ULI report looked beyond the physical office building at how the pandemic will impact work activity in general. More than 90% of workers will expect more access to online services, want more efficient supply chains, less of a commute and more focus on social impact, inclusiveness and health.
The conversation about workplace changes has been ongoing since the beginning of the pandemic. Most real estate expects agree that the pandemic has accelerated workplace changes, including rightsizing and the reassessment of workplace strategies. According to LightBox most CEOs out there are considering flexible work options and a reduction in their office space footprint post-COVID.