by Brianna Crandall — August 7, 2020 — As organizations around the world begin reopening their offices, most companies in a new survey conducted by global commercial real estate services and investment firm CBRE Group are offering their employees greater flexibility for hybrid work, working away from the office at least part of the time. At the same time, a large majority of companies say that, in the long run, the importance of the physical office will decrease only slightly or remain the same.
In a surprising finding, more than 70% expressed confidence that they can set their long-term real estate strategy even amid the pandemic, notes CBRE.
The survey of real estate executives at 126 global client companies reveals that many are planning to accommodate hybrid work arrangements. These arrangements offer employees the choice of when to work in the office, from home or from elsewhere. Additionally, nearly 70% of respondents plan to offer some portion of their workforce the choice of working remotely on a full-time basis, nearly twice as many as did so prior to the pandemic.
Even with an anticipated increase in remote work, the largest portion of respondents — 41% — said the importance of the physical office will decrease only slightly in a steady-state environment. Nearly 40% of respondents said the importance of the physical office will increase or remain the same.
Julie Whelan, CBRE Americas head of Occupier Research, stated:
The importance of hybrid work models is accelerating. Employers are exploring which aspects of remote work best suit their workforce and which combination of remote work and in-office work yields the best results. This shift places even greater importance on positioning offices to safely foster collaboration, efficiency and culture-building when workers need to meet in person. This is just one of several ways in which the pandemic will have a long-term impact on real estate planning.
CBRE’s survey was conducted in June and included mostly large global companies. By industry, the largest portion (21%) was banking and finance, followed by tech, media and telecom (16%); industrial and manufacturing (13%); and business and professional services (11%). This is the first in a series of surveys that will gauge changes in real estate executive sentiment over time; the next survey is planned for September.
Additional survey insights about how companies are preparing for the future of workplaces include:
- More than 44% of respondents describe themselves as “somewhat confident” that they can establish a long-term real estate plan today. Another 29% describe themselves as “highly confident.”
- For now, companies are focused on real estate activities with critical timing elements, such as lease renewals, renegotiations and contractions. Longer-term plans, such as relocations and expansion plans, have been largely put on pause.
- Most companies (73%) expect flex-office space to play at least a minimal role in their real estate strategies. These are favored for the flexibility of shorter-term obligations and the ability to contain costs.
- Fewer than one in ten companies indicated they are considering moving away from high-density urban cores; one-quarter are looking into suburban satellite strategies.
- Nearly half of respondents (49%) expect the state of the business environment to be better within six months. Another 28% anticipate it will be roughly the same as now.
- Real estate has risen in importance on the corporate agenda, with more than 40% of respondents saying the C-suite will have a strong influence over long-term strategy.
The future of the office is on an accelerated path of change that started before COVID-19. The new office will balance the needs of a hybrid workforce that operates between virtual and physical environments. We will see a lot of experimentation as companies determine which configurations of workplace design work best while introducing a higher level of health and safety practices.
To download CBRE’s report on its 2020 Global Occupier Sentiment Survey: The Future of the Office, visit the firm’s website.
Los Angeles-based Fortune 500 and S&P 500 company CBRE offers a broad range of integrated services including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services through more than 530 offices and 100,000 employees (excluding affiliates) worldwide.