2022 Will Be A Year Of Decisions For Those In The Office Market
The decision by many companies to delay bringing people back to the office has left the market in a state of suspended animation and everyone is asking what’s next. While there are no easy answers, the big return is expected to finally begin after the first of the year, meaning landlords, tenants and managers will need to make a flurry of decisions on leasing, office designs, and health and safety protocols.
With so much still unknown, experts say the watchword for 2022 will be flexibility.
“Most of the buildings we’re building right now, you can get in without touching anything,” he said. In another property, the company installed a golf simulator, a move that got quick results.
“One [prospective] tenant said, ‘this is the space for me,’ and it was the golf simulator which put it over the top.”
But simply redesigning office spaces and filling each with the latest trendy amenities probably won’t be enough. The problem is no one yet knows how companies will adjust to the new reality, especially since everyone will probably make constant adjustments based on progress toward suppressing the coronavirus pandemic and on how well hybrid schedules work.
“Maybe the return to work will initially mean three days a week, but two years from now, it could go back to five days a week,” Next Realty President Marc Blum said.
“We’re still seeing very low attendance rates in our buildings and that’s true across the country,” Riverside Investment & Development Co. Executive Vice President Kent Swanson said Thursday at Bisnow’s Redesigning the Chicago Workplace in-person event.
That means office users of all sizes must decide how they will occupy spaces next year without being able to get much feedback from their employees.
“That’s a very hard thing to get over,” Swanson said, adding most office users will need a period of trial and error before they hit upon the right strategies to keep workforces both comfortable and productive. “We’ll need to work our way back to normal.”
There is still some hesitancy about returning among many, so landlords and builders need to make extra efforts and provide incentives that will make users eager to come back, according to Chris Phares, vice president of Clark Construction. That could involve adding extra comforts that remind people of home, where they worked for 18 months, or high-tech safety features such as touchless technology that opens elevator doors.
Even with all the uncertainty in the market, tenants aren’t exactly hunkered down, Blum added. Many show signs of at least getting ready to make big decisions, even if few are pulling the trigger just yet.
“We’re seeing a lot of touring, a lot of people kicking tires,” he said.
Yet some firms have made big commitments, Swanson said. Kirkland & Ellis signed one of the largest downtown Chicago leases seen in years when it agreed to occupy about 600K SF in the 1.2M SF Salesforce Tower, now under construction in River North.
The move will bring the massive new trophy building close to full occupancy when it opens in 2023. It may also be a sign that in the post-Covid era, companies will seek out the top Class-A spaces, ones that provide the full suite of amenities needed to entice workers to return.
“[Kirkland & Ellis] felt they had to do that move so they could satisfy a discerning workforce,” Swanson said.
