Back to the office? That’s more of a realty today as a growing number of companies are requiring that their employees return to their cubicles, conference rooms and desks.
A recent survey by CBRE revealed that companies in the United States are becoming more proactive in requiring office attendance compared to last year. According to the survey of 207 companies with U.S. offices, 65% of respondents stated that they now mandate in-office work at least some of the time. This figure represents a significant increase from the previous year when only a small percentage of respondents required any in-office attendance.
The survey also highlighted that office attendance levels have reached a long-term steady-state in 60% of the surveyed companies, a notable rise from the 43% reported last year. These new attendance levels are often lower than pre-pandemic levels. However, 38% of companies said that they anticipate a future increase in their attendance levels.
In response to the shift to hybrid work schedules, in which employees work part of the time remote and some days in the office, many companies are downsizing their office spaces. According to CBRE’s survey, 53% of companies expect their office portfolios to shrink over the next three years, while 46% anticipate either no change or plan to expand their office footprints.
To accommodate attendance patterns, employee preferences and market dynamics, companies now have a range of options to reshape their office portfolios. The survey found that 58% of companies are opting to renew their leases, even if it means occupying less space. Additionally, 49% have allowed leases to expire, while 32% are relocating to higher-quality office spaces. Notably, 40% of companies are revisiting their existing lease terms, leveraging their increased bargaining power in negotiations.
Manish Kashyap, CBRE Global President of Advisory & Transaction Services, said that this is just the latest example of real estate evolving as a response to changing human behavior.
“This means greater flexibility in lease terms, more occupiers gravitating to higher-quality office space and an increase in adaptive reuse of obsolete buildings, Kashyap said. “Through it all, the office remains a cornerstone of employee engagement. Our survey found that more than three-quarters of companies want employees in the office at least half the time.”
The survey also revealed that many companies are interested in additional flexibility options for their office portfolios if building owners are willing to accommodate. For example, 51% of respondents expressed interest in landlords providing shared amenities such as meeting spaces and tenant lounges. Another 39% are looking for ways to align their costs with office attendance patterns, such as paying reduced rent until reaching a steady-state attendance threshold.
Additionally, 34% are interested in accessing fully furnished office suites within their buildings that can be quickly occupied when needed.
Interestingly, the survey identified commuting as a significant factor influencing companies’ choice of office buildings. The top two amenities preferred by companies, out of the top 10, were directly related to transportation to and from the office.
What are the most desirable building amenities for occupiers?
- Access to public transportation: CBRE said that 59% of companies responding to its survey prioritized this perk. This amenity topped CBRE’s list.
- Car parking: 54% of responding companies cited this as a priority.
- Onsite café or food-and-beverage service: A total of 53% of respondents pointed to this as a key amenity, third on CBRE’s list.
- Shared meeting space: Shared meeting space was ranked as an important amenity by 47% of respondents.
- Sustainable building features and operations: Bringing up fifth place, this amenity was cited by 39% of respondents.
The survey also highlighted different approaches to office attendance between two prominent industries in the U.S.: technology and finance and professional services. In many cases, finance and professional services companies were found to be more proactive in promoting office attendance compared to their tech counterparts.
Julie Whelan, CBRE Global Head of Occupier Research, noted that finance companies, in particular, displayed a stronger focus on office attendance, especially during periods of economic uncertainty.
“Similarly, finance and professional services companies are more likely to encourage employees to spend most of their workdays at the office, while tech companies are more likely to allow mostly remote work,” Whelan said.