When It Comes To Technology, Returning Tenants Will Ask For More Than Ever

2021 could end up being one of the more momentous years in the office market. Tenants will have to decide not just when they return to their workplaces but how many employees will remain at home and whether they still need the same pre-pandemic footprint. In addition, as advanced safety features are incorporated, tenants and landlords will need new technology to support these changes.

And all those decisions may start getting made quickly, especially if vaccinations continue at a robust pace and the U.S. starts approaching herd immunity.

“What we’re seeing is that a number of large tenants are dipping their toes in the water, trying to see what their workplaces are going to be from a recruiting standpoint and from a general functional standpoint,” Brookfield Properties Director of Office Leasing Christine Torres said last week during Bisnow’s Chicago Deep Dish: Innovative Technology Powering the Workplace of the Future webinar.

It’s difficult to predict how this ever-changing situation will get resolved, but Torres said she believes it’s unlikely the dense collaborative offices, so trendy just a few years ago, will return. Tenants will most likely have to space employees out and allocate more than 150 SF per person.

“Ultimately, [tenants] do want a flagship space from a branding perspective, but it will be different from what we were envisioning in 2019,” she said.

CRG Senior Vice President Geoffrey Kasselman agreed that tenants will soon return.

“I’m in constant contact with occupiers, and they are doubling down on their space commitments,” he said. “I’m increasingly optimistic by the day and by the hour. I think people are really anxious to find ways to be together, including in the workplace.”

Companies have found work-from-home techniques have been both cost-effective and productive, and considering the expense of building out online capacities in so many homes, those strategies are likely to have staying power, Kasselman said.  

“But if you have herd immunity and everyone is vaccinated, the fears of riding in an elevator, using public transportation, fears of being in communal spaces should start to subside. People will come rushing back to the CBD environment where there is such a critical mass of restaurants, cultural outlets, entertainment venues and hotels.”

Kastle Systems Director Michael Hayford said his firm has already charted the developing return. Of its clients in the nation’s top 10 markets, an average of roughly 15% were back in the office last month, but that has already jumped to 25%, with several Texas cities above 35%. Chicago is now at 19.6%, he said.

But companies will ask more from landlords when they do return, according to Level-1 Global Solutions CEO Thomas McElroy.

“There will be a higher infusion of technology in buildings going forward,” he said.

That includes touchless technology that allows tenants to access elevators and open doors with their phones, advanced air quality monitors and air filtration systems. 

“It's now a permanent part of the conversation,” JLL's Jason Lund said.

He likened it to what happened decades ago when environmental standards changed and it became required for landlords to ensure materials such as asbestos were removed from workplace environments.     

“We will get to a new normal — the issue is how and in what way,” he said. 

McElroy said from now on, anyone developing a new office product, whether new construction or adaptive reuse, will have to pay far more attention to their project's connectivity, which will determine whether it will be able to offer all the high-tech safety solutions tenants will demand. Once the architects and engineers answer the basic structural questions, the next step will be obvious.

“The next person you need to hire is your technology consultant,” McElroy said. “That can't be an afterthought.” 

And because technology changes so fast, developers will need consultants who look ahead.

“You need to plan for the first technology upgrade so you'll minimize disruption and downtime.”