Remote Control: How CRE Can Embrace Work-From-Home In Its Own Offices
This moment in the history of how people work and use offices catches commercial real estate firms trying to thread a very delicate needle: caught between the necessity of selling your own product and showing that a return to working from an office is safe; and the need to adapt working practices and culture to cater to a workforce that, during the coronavirus pandemic, has normalized and, in many cases prefers, more remote work.
Can real estate companies, whose identity and business model have for centuries been tied to a specific place, embrace a new world likely to see people working remotely, maybe in cities far away from their office?
CRE Recruiting CEO Allison Weiss, a consultant and headhunter for industry talent, said that many clients she’s worked with — both employers seeking talent and employees looking for new gigs — are looking past the “flying by the seat of your pants” approach which, understandably, characterized the first few months of the pandemic. Working remotely and working effectively aren’t mutually exclusive, and CRE firms that don’t adapt both their office space and corporate culture risk losing talent.
“At the heart of these remote work policies is people’s feeling of safety, and being trusted by their employers,” she said. “If you don’t feel trusted, then you don’t feel respected.”
Amid the uncertainty of early 2021, one thing workplaces can count on is an increasingly significant shift toward remote work. Data from numerous industries and sources suggest that whatever the post-pandemic new normal may be, working outside the office, in some form, is likely to stick.
A Joblist survey found that 60% of workers worked remotely last year, while a New York Times poll of remote workers from August found 86% were satisfied with the arrangement. A survey from Upwork suggests roughly 80 million Americans will be working remotely in 2021.
There will be a big slug of real estate staff among those 80 million. A report from the Urban Land Institute and EY published in October found that 59% of 550 real estate professionals surveyed from around the globe expect to work remotely two days a week or more from here on. That compares to 69% who worked remotely for one day a week or not at all before the pandemic.
Many CRE firms and business analysts have put faith in the emergence of a hybrid workplace, which blends in- and out-of-office time during the week, with focus time at home and more collaborative events in offices outfitted for interaction and teamwork, as the new norm. Will CRE firms be able to “walk the talk,” asked Weiss, considering that some tend to be more old-fashioned when it comes to remote work and changing workplace dynamics? Brokers, for example, may rail against the shift, she said, since they believe in collaboration and troubleshooting in real time with colleagues in a shared office.
“Since we’ve had so many people migrate to different parts of the country and world, there’s an awakening that to get the top talent, there needs to be more flexibility,” said MetaProp partner Maureen Waters, a longtime commercial real estate executive.
“As people come back to the office, it’ll be more important than ever for people to have workplace transparency,” RXR Chairman and CEO Scott Rechler said. “There’s going to be a trial-and-error period of figuring out the right mix of people and amenities, and that won’t happen naturally. It’ll need to be tweaked, and companies need to provide transparency and use data to modify and adjust their plans and optimize their space and the employee experience and productivity.”
Waters sees investment in technology — including the use of digital twins (a digital model of a building) to help streamline building operations, and an array of next-generation sensors to aid with social distancing and space optimization — driving some of this data-driven decision-making. Increasingly, there’s been a big push toward investing in innovation in CRE, especially to find efficiencies and cost savings during a lean time. She sees real estate companies taking tech more seriously and adding chief technology officers and chief operating officers to their C-suites.
“This is an exciting time for real estate,” Waters said. “The new normal will require a certain amount of technology to be successful and competitive. It’s moved from a landlord-centric market to being more about what employees need to be happy and successful in this environment; the theme now is flexibility.”
RXR has been rolling out a large investment in new technology across its New York portfolio, including the firm’s own offices in Manhattan, Westchester and Long Island, which now operate at 90% capacity on a hybrid work model, with staff in office every day except Friday.
This technology, called RxWell, uses an array of sensors to determine where workers are, tracking how space is used, which rooms are occupied and who is collaborating together. RXR employees’ home locations and travel plans are also fed through an algorithm to determine risk and how often to get tested; all employees are tested every three days, every week or every two weeks, depending on risk profiles, and contact tracing helps immediately isolate any cases that do appear at the office. If anybody gets sick, sensor data can immediately help with contact tracing.
“We’re still in COVID mode right now, and this technology is giving us the tools to safely coexist with 90% of our team back, what I call the new abnormal," Rechler said. We’re able to do it safely, and we give all our team members tools to monitor health and wellness, to see building air quality and avoid congestion points within the office.”
Rechler said that COVID felt like 9/11 in that it’s a world-changing event. He sees the use of technology like this as an important way for CRE firms, much less office tenants in general, to make sure their employees feel safe and as comfortable as possible.
But culture is as important, if not more so, than technology. If CRE firms want to create hybrid office scenarios for their employees, they need to create safe and secure office space to come back to, but they also need to have a serious rethink around remote work policies, according to Weiss. Demands for remote work have become more prevalent, and workers are “drawing a line in the sand” about coming back to traditional work environments.
“More people want to know how a company has navigated this transition,” she said. “They need to know how connected, understanding, and flexible and forward-thinking the company is.”
What she proposes is evolution, not adaptation. It’s understandable that companies have worked to adapt to changing lifestyles, caretaking responsibilities and other shifts due to working from home. But now that many see a cultural shift in the making, a thoughtful conversation and premeditated action, not just rapid-fire adjustments, is needed.
“Lots have adapted, but few have thought ahead,” she said. “Taking an all-hands meeting and moving to Zoom, that’s adaptation. The most successful clients are optimizing, using these new tools and scenarios to create a better result. What is and isn’t working? It’s time to be introspective and to really execute.”