Sobering Report For Landlords: 59% Of Businesses Expect Office Square Footage To Shrink
Nearly 60% of real estate professionals embedded in corporations surveyed by CoreNet Global say their businesses will shrink their office square footage in the wake of the coronavirus pandemic.
That will be supported by a shift in how companies think about their employee base and work style — 69% of those surveyed say 9-to-5 schedules are a thing of the past, and 57% said their companies are open to hiring employees regardless of where they live and allowing the staffer to work completely from home.
Salesforce also warned only the smallest share of its workforce is expected back each day, which raises serious questions about its square footage requirements in the future, even as it moves ahead with previously announced real estate expansion plans.
CoreNet sent its survey in January to its corporate real estate management membership, with 161 members responding to a series of questions.
The data shows, like it or not, the pandemic has shifted the public's perception of the office, and it's not returning to the pre-pandemic normal.
Of those surveyed, 59% said they expect their office footprints to shrink. Of those expecting a decrease in space, 36% expect to decrease their square footage by 10% to 30% in the next two years. About 12% expect to reduce their space by a whopping 30% or more, and another roughly 12% say space usage will drop by 10% or less.
Only 4% of respondents expect to expand their space by more than 30%, while another 10% expect to grow their footprint by 10% to 30% and 7% expect their increase of space usage to come in under 10%.
Only 20% expect no change to their square footage requirements.
Coworking is expected to play a greater role as offices shrink. Thirty percent of respondents expect to increase their coworking usage post-pandemic. Another 53% intend to keep coworking space at current levels post-pandemic, and 16% expect to decrease their coworking usage.
Survey respondents predict only 46% of the future workweek will be spent in a traditional office setting, with 43% spent at home or in a remote location and another 11% in a coworking environment. Sixteen percent expect to open satellite locations closer to where their employees live.
The psychology of the office environment also shifted from being a place where employees grow their own careers to a collaborative environment, with 88% of those surveyed saying future offices will be teamwork-focused centers rather than places for individual contribution.
Corporate real estate leaders expect site selectors to grow pickier about their office locations, with 53% saying crisis readiness on the part of cities and counties surrounding them will play a greater role in where they choose to lease space.
Despite this focus on safety and pandemic-readiness, less than 9% of those surveyed said their companies will require returning employees to be vaccinated.