The pandemic-induced changes to the economy and the nature of the workplace are not only challenging conventional business wisdom, but leading to a larger evolution that is seeing the concept of remote work becoming permanent.
In other words, welcome to the “new normal.”
Employees no longer view remote work as a benefit or perk, but something that weighs heavily in career changes. Employers are adapting to the new environment by making workplace flexibility a built-in feature of a job and by downsizing the overall scope of and need for office space.
Enter Allstate, who has just announced intentions to offload its headquarters in suburban Northbrook. The insurance giant, which has long been one of the state’s largest employers, is fully embracing the hybrid work model, allowing flexibility to employees to determine where they reside and how much (or little time) they choose to work out of an office.
“Allstate’s employees have more choice about where they work and many are choosing to work from home,” Allstate spokeswoman Mallory Vasquez said in an email to Chicago Tribune business reporter Robert Channick. “As a result, we will sell our office in Northbrook but plan to maintain our significant presence in the Chicago area.”
Allstate’s sprawling campus, which spans nearly 2 million square feet over 122 acres, could be considered yet another casualty of the pandemic and the ongoing trend in recent years of legacy Chicago-area corporations abandoning suburban campuses for sleek new offices in the city.
But is it?
As the pandemic stretches into a third year, there is still much to be determined about the future of the workplace and when (or if) we’ll see a great migration back to the office. Many corporate heads see the potential exposure to risk in taking on big office leases, or by simply maintaining pre-pandemic real estate assets that had room for thousands of employees.
However, in Hoffman Estates, the former Ameritech (and later AT&T) campus has been totally overhauled and reimagined as a mixed-use destination for retail and compartmentalized office suites. The co-working model in which companies can rent as much or little space as they want with as long or short of lease terms is something that is likely to become more commonplace in existing office buildings as landlords not only compete with one another, but compete with their own tenants who are offering a record amount of sublease space for rent.
Now dubbed Bell Works Chicagoland, the newly renovated office campus features 1.2 million square feet of office space, 60,000 square feet of conference areas, storage and amenities, as well as 60,000 square feet of space for restaurants and retail. Additionally, Somerset Development plans new residences on the site in the coming years, which could bolster the retail offerings and demand for office space.
Additionally, the Bell Works hub-and-spoke foot print may further lend itself to the evolving office environment, which is likely to borrow from urban planning principals and look more like “neighborhoods” than the purely cost-conscious open environments of recent years’ past.
While the pandemic-inspired millennial flight to the suburbs may have been overblown to a degree, there is no doubt more interest in the suburbs than there has been in recent years among younger homebuyers. And despite the tired tropes and negative headlines about the Chicago region, the Windy City is consistently ranked one of the best large cities for travelers, quality of life, aesthetic appeal, cost of living and overall desirability.
The evolving story of Allstate’s exit from its Northbrook campus could certainly viewed as the end of a chapter, but there’s also a new beginning in the making. And then there’s the contrast with competitor insurer Zurich, which doubled down on its suburban presence in recent years by building and relocating to a new campus in Schaumburg in 2016.
As the work-from-model has challenged the needs of overall office foot print, major companies are still expected to maintain a presence in the traditional workplace. And as more millennials approach their 40s, there could be yet a further shift in residential focus — and consequently, office focus — to the suburbs in the coming years.