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The Post-Pandemic Office Must Reassess Its Workers' Needs

Boston’s business leaders are at a crossroads as the coronavirus pandemic has dramatically altered their workplaces.

A retreat from office buildings has led to historic negative absorption and record-high subleasing availability. Office occupancy rates in downtown’s high-rises sat between 8% and 12% post-Labor Day, with just 4% to 5% of offices occupied by mid-December, according to CBRE.

Offices must rethink their physical spaces and office culture once employees return, experts said.

Businesses need transition strategies as optimism among researchers and economic leaders grows for a potential 2021 second-half economic rebound, experts on Bisnow’s Reopening The Workplace webinar said Tuesday. Office managers will have to retool their workplace beyond touchless technologies and new air filtration systems to encourage employees to leave their homes, experts said.

The current office situation resembles an ecosystem that must consistently adapt to external changes, Gensler Design Director Alfred Byun said.

“The reality of our space right now [is if] it was not able to adapt, it’s sitting dark right now,” Byun said. “In an ecosystem, there’s change. Things die and decay in an ecosystem, but it gives life to other ideas.”

Office developers shouldn’t be investing money into architectural changes just yet, Stantec principal Colleen Arria said, but instead into analyzing research and data.

“I think now is the perfect opportunity, as you start to trickle back into your real estate, to really start understanding what the ecosystem is and how people are using it and studying it,” Arria said. “That’s really how the money should be spent.”

Clockwise from top left: CBRE's Julie Whelan, Stantec's Colleen Arria, SMMA's Jonathan Merin, Gensler's Alfred Byun and Zendesk's Danielle Newton.

Developers are already responding to the bleak office market by pivoting massive office projects to accommodate life sciences tenants in an attempt to capture that fast-paced market. Oxford Properties last month submitted revised plans to the city for 125 Lincoln St. in downtown to build a nearly 400K SF life sciences building, reducing previous plans for an office tower nearly twice that size.

Pandemic-oriented office adjustments including air filtration systems and touchless technology for elevators and meeting rooms provide comfort but aren’t solutions to ensuring a more inviting space, SMMA Corporate and Commercial Studio Leader Jonathan Merin said.

“It’s a mitigation strategy,” Merin said. “I wouldn’t call it a solution … We all have to be very careful about what we’re promising.”

Upgrades for HVAC systems could cost hundreds of thousands of dollars upfront, at a rate of $3 per SF, and the systems could increase utility bills more than $100K annually. Outdoor spaces, which the struggling restaurant industry adopted, could allow for an easier shift back, experts said.

“How are we going to create spaces that can be used year-round?” Arria said, asking aloud about the Northeast. “That’s going to be big when we go back, people are going to want better outdoor spaces that can not only be used for fun, but for work, too.”

Outdoor space is a feature of the 43-story One Congress tower at downtown’s Bulfinch Crossing, developed by HYM Investment Group. The $900M skyscraper, a joint venture with National Real Estate Advisors and Washington, D.C.-based Carr Properties, will share a large patio on the ninth floor with the adjacent Sudbury luxury residential high-rise.

Major companies have committed to keeping physical office locations despite remote work policies. Such moves represent acknowledgments by companies that the office remains an important space for creativity and social development for younger workers, San Francisco-based Zendesk Workplace Experience Director Danielle Newton said.

“I think a lot of companies really, if they’re smart, they’re sitting back and saying, 'What do we use our office space for?'” Newton said. “They’re waiting to put those pieces back together before they go back into the market.”

Related Topics: Gensler, Stantec, Zendesk, SMMA