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‘Hub-And-Spoke’ Office Model Gains Traction With CRE Investors


Companies across all sectors are starting to bring employees back into the office, after months of working remotely. Most are operating at a greatly reduced occupancy, as business leaders weigh the risks of returning and consider the future of the workplace.

Industry speculation suggests that offices won’t return to their former density. Instead, employers are thinking about hybrid work arrangements, allowing for both in-person and remote work, which could help reduce square footage in expensive downtown office buildings.

That hybrid model could also include the revival of the suburban satellite office, which would offer workers the option of a short commute and flexible workspace that isn’t just their kitchen table.

“The places that will benefit will be in the suburbs, and that's what we're advising a lot of our clients right now — to look at suburban office,” Transwestern Executive Managing Partner Steve Pumper said during a Bisnow webinar June 9.

Pumper said suburban offices will perform well over the next three to five years, as long as they are properly amenitized. With public transit still a major safety barrier, many are also reluctant to return to long commutes.

“It's got to be good quality buildings, you don't want to be the low-cost provider, you've got to have good amenities, you’ve still got to have a good vibe that people feel good about working in,” Pumper added.

Manulife Real Estate Global Head of Real Estate Investments Michael McNamara said he also believes in the “hub-and-spoke” model, where a main office in the urban core will remain, but there will also be a satellite location, allowing people to work closer to home.

“I kind of like this hub-and-spoke model that people are starting to think about, and I read about today. I think it is going to benefit suburban markets, at least in the short term and possibly in the mid-term. But long term, this is not the death knoll of New York City,” McNamara said.

Transwestern partner Lindsay Ornstein said employers and workers will become more flexible about where people work, to leverage productivity.

“People will need to work from or will want to work from where they will work best, for the work they are doing in that moment in time,” Ornstein said.

That could mean that an employee might work from home one day, and then take advantage of a suburban office to touch down near home. On other days, the employee might want to work from a downtown office, to collaborate with others. 

Though the suburban office may indeed rise, Ornstein said she doesn’t see urban core offices, like those in Manhattan, simply migrating to the suburbs.

“There's no world I see where the city is not still the center of everyone's universe. It is where thought leadership happens, it is where energy and collaboration and social interaction thrives, and everybody wants to be part of that, it’s part of our emotional well-being.”