What the future of commercial office space will look like

Top executives from three of the most successful commercial real estate firms in the world spoke recently in Phoenix about what the office of the future will look like here and across the nation during and post-pandemic. 

While the face of commercial office space could see permanent changes as it adapts, they all predict that the Phoenix metro region, unlike some other large cities, will continue to see healthy growth in the sector. 

Office space is not going away, they said. 

“In just the last few weeks, there’s been a huge uptick in activity in inquiries, and companies are going to continue to look at Arizona,” said Cathy Teeter, managing director of the Phoenix office for CBRE, the world’s largest commercial real estate services company.

Affordability and lifestyle — including the ability to “park your car in a garage or adjacent to your house” — are top reasons the Phoenix area continues to attract interest, she said.  

Teeter and two other experts spoke this month at a meeting of the nonprofit Valley Partnership, the voice of the real estate industry. 

Martha dePlazaola Abbott, co-managing director and principal at Gensler, a global architecture, design, and planning firm, and Molly Ryan Carson, senior vice president and market leader of the Southwest region for Ryan Companies, a national builder, developer, designer, and real estate manager, also were panelists. 

They discussed what the industry is doing to reimagine and redesign the office environment. They are turning to employees through surveys and other means to make those decisions. 

Surveys show most people want back in the office

Employee surveys indicate most Americans do not want to work from home full-time. But they do enjoy the flexibility of being able to do so, they said. 

In May, Gensler’s Research Institute published the U.S. Work from Home Survey 2020 that provides insight into the home experience and how it is influencing people’s expectations for the future. The study surveyed more than 2,300 full-time U.S. office workers at companies of 100 or more people from April 16 to May 4. 

It found that employees overwhelmingly want to return to the office, but with changes to address the pandemic. Also, many workers, particularly young and new employees, are struggling in the home office setting.  

Among the findings:

• Only 12 percent of workers want to work from home full-time
• Seventy percent of people want to work in the office for the majority of their week as long as there is more space for social distancing and other safety measures
• Fifty-five percent of respondents said working from home makes collaborating with others harder, and 51 percent said staying up to date on the work of others is more difficult
• Millennial and Gen Z workers report being less productive and less satisfied at home
• People expect to return to the office, but it should look different with stricter sick policies and cleaning and space configurations for physical distancing

The office of the future  

Teeter said CBRE surveys show employee retention and safety is a critical concern for companies. So whatever it takes to keep employees happy and healthy will dictate how they move back into the office, she said. 

“People want flexibility. They don’t want to give up their place at the office. They just want to have flexibility in making that decision for themselves. They want to work remotely between two and three days a week.”

All three panelists said many companies will respond with a mix of options for workers. Physical distancing will dictate the new office configuration.

Abbott of Gensler said, “Seventy percent of employees don’t want to be at home all the time, so they (clients) are trying to create a hybrid environment where you come to the office for meetings and collaboration but you do your focus work at home.”  

Arizona can expect healthy future for commercial office space   

Meanwhile, fears of office space stagnating and rental relief requests are not surfacing in many regions, the panelists said.  

In Arizona, they report seeing an uptick in interest for relocations and expansions from a mix of industries: technology, healthcare, manufacturing, insurance, pharmaceuticals, financial technology.

Ryan Companies’ Carson said she’s seeing clients talk of needing more space, not eliminating it with more employees working remotely.  

“We haven’t had many companies say they are downsizing. They are not people downsizing. Now, they’re thinking when they come back to the office they’re going to need that additional elbow room and how can they do that with their square footage.”

As the workplace evolves, Arizona will continue to be a desirable location for many reasons including its central location, Carson said.  

“You can get virtually anywhere from here now. It has become a place for everyone. It’s for the hourly employee at a call center and it is for a CEO, and it is for having both of those individuals under the same roof. This is becoming more common now because of that desire for synergy, communication and shared thought within the office.”

For more information about how offices can reopen safely, go to: Reopening the World’s Workplaces.