CRE leader: The death of the office has been greatly exaggerated

Larry Chapman | Jun 04, 2021

Seneca Commercial Real Estate

article originally appeared

In 42 years of office and commercial real estate development, I’ve witnessed many confident predictions about the demise of the office.

Thesepredictions, of course, did not cometrue. Instead, each time, the officemarket continued to evolve and grow.In the months and years to come, thesuccessful evolution of commercialprojects will lean on familiarapproaches, even as the details—whattenants want in the post-pandemicoffice — change. But the future officeitself, similar in some ways,transformed in others, is not dead. It isn’t even sick.

Technology most often drives this “death of the office” talk. Fromthe introduction of fax machines, personal computers and email,and the rise of tech companies, to the pandemic with the massadoption of virtual meetings, various technologies that enable remote communications make people question the usefulness ofoffice space.

Of course, the pandemic is different. Vast numbers of people wereforced to work at home. And true enough, lots of people likeworking that way, though many others do not. As the pandemicfinally recedes, and people are tiring of virtual meetings, we can allsee the stark inadequacies in remote interactions, which cannotconvey all the important nuances needed for satisfying andeffective human exchanges.

Based on decades in this business, I believe a small fraction of theworkforce can be truly effective working remotely. Certainly, moretask work can be remote, but any need for people to collaboratestruggles in a remote environment.

The creativity and spontaneity that comes from in person andgroup interactions just do not happen when people are isolated orjust faces a screen. When people come together at work their valueis greater than the sum of their parts. But, when people work fromhome, their value is often only just the sum of their parts.Employers are already learning to measure the differences whentheir people are together vs. when they are apart. They willultimately begin to figure out how to put a value on that difference,and most will find ways to bring their workforce together, even if indifferent ways.

A January 2021 survey by PwC found that most businessexecutives, 87%, expect to change their office space strategy inthe next year, with more than half expecting to need more space,not less. Part of this is driven by a need to reimagine the office, tospread people out and look for satellite locations. As for theiremployees, nearly 90% say that the office is important forcollaboration and building relationships.

So, offices aren’t going anywhere. How they are used will change,as has always been the case. We live in an experience economy,and it is incumbent on office developers to create environmentsthat help employees be creative and develop innovative solutionsfor their companies.

The work environment will need to be a place where people wantto come to work, where they can combine work and play, and seeksome personal refuge. The environment needs to be safe andsustainable. Workers will focus more on social responsibility,promote life-work balance, and be wellness-centered. Officebuildings should encourage the exercise of ideas and let loose ourhuman ingenuity and intuition.

Successful office environments will be places where employerscan attract the best and the brightest talent to create a competitiveedge. Competition for talent will be ever more challenging, and it isthe landlord’s responsibility to provide that environment, so thetenants can focus on growing their businesses. When donecorrectly, employers will see the bottom-line impact and thesynergies created as a result of well-executed office environments.

I will never discount the power of human ingenuity. But it takesmore than ingenious ideas. It takes organizations to make thosegreat ideas work. And this is something that only people comingtogether to collaborate can deliver and they, in turn, will keep theoffice environments alive and well in whatever evolution comesnext.

Once again, reports on the death of the office have been greatlyexaggerated. The office of the future will continue to be a placewhere we will build our businesses, collaborate, innovate, andenjoy the company of others.

At Seneca CRE, we think bolder, and we rise higher – let’s build together. Connect with Seneca-CRE