What a Post-Pandemic Return to Office Spaces Will Look Like for Commercial Real-Estate Entrepreneurs
If you invest in commercial real estate, you'll want to familiarize yourself with real-estate trends that will affect your bottom line.
Nearly every industry has shifted in some way during the Covid-19 pandemic — and commercial real estate (CRE) was no exception. While many industries have seen things swing back to normal as the pandemic has progressed, CRE will likely be changed forever.
While some people have speculated that the traditional office will never come back, most experts predict that offices aren’t going anywhere.
1. Hybrid offices are here to stay
If you ask most people how they enjoyed working remotely during the pandemic, they’ll likely tell you there were some pros and some cons. It allowed employees to skip their commutes, take more working vacations and spend more time with their families.
At the same time, many employees felt isolated or distracted while at home. Hybrid office spaces will become the new normal, allowing people to experience the best of both worlds.
A recent WeWork study found that roughly half of employees prefer to work in the office between 1 and 4 days a week. As employers make long-term plans for their office space, they’ll likely keep employee preferences in mind.
Because employers have hybrid office spaces on their minds, CRE entrepreneurs should be aware of how a hybrid workspace looks different. As a CRE investor, you want to attract the best tenants to make the most out of your investment.
In a hybrid workspace, the whole team does not need to be present at once. Many employers may take advantage of smaller office spaces to save money on rent. This could be advantageous for newer CRE entrepreneurs hoping to break into the market with smaller investments. Going forward, you will likely find more companies interested in a smaller space, allowing you a greater chance at quickly turning a profit on your investment.
2. No more open floor plans
Toward the end of the 20th century, open floor office spaces became the overwhelmingly popular office trend. By the early 2000s, it became difficult to find any young companies working without an open floor plan.
Covid-19 highlighted the issues with the open office, however. The lack of barriers between coworkers created a perfect opportunity for sickness to spread. As companies return to the office, employers will prefer office spaces that minimize the spread of any type of illness.
Not only does the open floor plan allow the spread of viruses, but it also creates a more distracting environment. Prior to the pandemic, the open floor plan was beginning to lose popularity because it’s difficult to focus on your work when your coworker is on a phone call right next to you. During the pandemic, many employees adjusted to being able to control their workspace while working remotely. As workers return to the office, they’ll want spaces that have some amount of privacy.
To maximize cash flow from a CRE investment, it’s important to create an office space where workers have a sense of control over their environment. This allows them to feel focused and safe from illness. In a post-pandemic world, open floor plans are unlikely to give workers that sense of control.
3. Offer flexible leasing options
CRE entrepreneurs should be willing to get creative with their investments in a constantly changing commercial real-estate world. While the need for office space will always be there, many people may be looking for flexible options.
Many businesses may want flexible leasing options because they want to be able to change locations and be more flexible with remote work during certain times of the year. Many remote workers may be looking for co-working spaces.
Look for opportunities to meet the changing needs for office space. Allowing flexible leasing can create an opportunity for you to change courses with your own investment as the times change. The best entrepreneurs are often the most flexible entrepreneurs.
4. Create a place for intentional collaboration (and connection)
When the business world moved primarily online at the start of the pandemic, many companies realized they didn’t have to work in an office to run the business successfully. Because the office was proved to be not entirely necessary, the office space of the future must be a place where people want to be.
A 2012 HBR study followed the office behavior of several different teams. They found the highest performing teams often casually socialized with each other in the break areas. Team players also often circulated the office, chatting with various team members.
The study showed that performance can improve when employees have a good office space to socialize in. While open offices have proven distracting, there must be gathering areas for group collaboration in every office. There should also be places where team members socialize in their free time. It’s these types of spaces that make employees enjoy being in an office.
A successful CRE entrepreneur must know how to create office spaces that make employees want to be there in person. If you create an environment that inspires creativity, collaboration and innovation, you’ll quickly attract high-quality tenants and create an excellent ROI.
Entrepreneur Leadership Network Contributor