More than two-and-a-half years after the pandemic closed office buildings and knowledge workers pivoted to remote work, many businesses are still figuring out a return-to-office strategy. It’s no surprise then that according to Costar data, Chicago remains in the middle of its largest supply wave of office space in more than a decade.
In this environment, our role at Tenant Advisors/CORFAC International is to help clients evaluate what their needs are as they’re faced with plentiful choices. Here are some basics that office-seekers should be considering:
Understand your space needs
We recommend clients start by getting a handle on their new “in the office” policy. That is, how many employees are in the office on each day? Does every employee need his or her own workspace? Do employees need dedicated quiet space or multipurpose space for meetings and collaboration?
Tom Koelzer, Tenant Advisors/CORFAC International
Depending on the responses to these questions, a tenant may be able to shrink its office space footprint. Many landlords are also building move-in ready spec suites to make it easier for a tenant to make a move, saving time and furnishing costs.
Which amenities matter?
There is a renewed interest in amenities, such as fitness centers and tenant lounges, that landlords believe will entice employees back to the office. However, these amenities may not appeal to every company’s culture. Consider what conveniences or social functions your employees will appreciate. Perhaps providing breakfast and coffee every day in a private break room is more meaningful to them than a rooftop social lounge.
City versus suburbs
Central business districts around the country are struggling to get employees back to the office. In Chicago, we’re seeing a historical high of 96 million square feet of vacant space (18.8% of total inventory) currently available, an increase of more than 13 million square feet since the first quarter of 2020.
We have seen some markets in the suburbs faring better, as some companies want to be located where employees have a shorter commute. However, consider what your employee makeup will look like long term. Do you need to hire junior-level recent college graduates who are more likely to live in the city, or are your employees primarily established professionals and parents who appreciate being closer to home?
How certain are your plans?
Some tenants are confident of their “in the office” requirements and are comfortable making a long-term commitment. Signing a longer lease may give them leverage to negotiate a larger improvement allowance. Other tenants are still sorting out their new in-the-office vs. work-from-home balance. They may be best served by a shorter-term lease renewal, or a move to a space requiring little to no improvements.
After making serious business decisions over the course of the pandemic, companies are ready to look to the future. With a plethora of space available, it’s a tenant’s market – but some decisions still need to be made. Companies may need to reevaluate their space based on how they’re using offices now, and a tenant-focused brokerage like ours can help them weigh the options.
Tom Koelzer is partner and co-founder of Tenant Advisors/CORFAC International in Schaumburg, Illinois.
