JLL executives struck an upbeat tone about the still-muddled return to office among U.S. workers on a company webinar on Thursday, characterizing the trend in 2021 — aside from the late-summer delta variant bump — as positive in terms of increasing occupancy and rent recovery.

Not only did they say that workers would eventually return to offices much of the time, but that investors would not be discouraged from taking long-term positions in office properties because office space usage isn't going to collapse.

At the heart of the return to the office is the need for human contact, JLL Americas Markets CEO John Gates said.

"Nearly half of U.S. workers are experiencing pandemic-induced mental health issues, and that's very likely exacerbated by virtual burnout and social isolation," he said. "The physical office will remain the center of the work ecosystem. It's the link to connectivity and also the culture of an organization. That's more crucial than ever because companies are really struggling to fill open positions and retain key talent."

The centrality of the office was the first of the "four truths" Gates outlined about office space in a post-pandemic environment. Two others were that the ultimate impact of the coronavirus pandemic on office space usage will be relatively minor, and that health and wellness will take on renewed importance, not just to employees but also employers.

"We held a recent survey of a hundred corporate real estate professionals about how they expected their footprints to change," Gates said. "And most of them responded that they were either keeping their existing space or expanding it."

Despite all that, Gates acknowledged, as the fourth of his "truths," that hybrid work will remain a large presence in the workforce from now on.

"Most companies had already embraced mobility and flexibility well ahead of the pandemic," Gates said. "The combination of on-the-go lifestyles along with advanced technology has made working from everywhere possible for quite some time."

Still, he said, when a new normal is established, remote work should augment, not replace office visits.

The webinar participants buttressed the case for a return to the office through various metrics. JLL Managing Director, Research & Strategy Christian Beaudoin, who moderated, cited the company's comeback index, which tracks entry badge swipe rates, leasing activity, lease term, unemployment claims and other data, as hitting a peak in July, followed by a slowdown as the delta variant hit.

"We're approximately 66% back to what we might call normal activity from where we were in 2019," Beaudoin said. "I know that for a lot of us in commercial real estate, things don't seem to be moving fast enough. But in reality, the progress that we have made since the beginning of this year has been incredible."

Not every company is going to see a return to the office as quickly or smoothly as one might hope, Beaudoin said. Those that do best will be those with the strongest lines of communication between management and workers.

"The companies that cannot clearly communicate their strategy to return are the ones who are struggling most with re-entry," he said. "Conversely, those that are communicating a clear sense of purpose and alignment have incredibly high attendance rates."

A key consideration for companies in their return strategies is the struggle for talent, JLL Markets Senior Director Steven Clark said.

"The war for talent is really fierce, especially for the leaders of the future," Clark said. "What are their expectations? Also, are you able to attract and retain diverse talent in a particular location?"

JLL Capital Markets CEO Mark Gibson said that investors aren't discouraged by current conditions, since they are looking for long-term yield. There is record liquidity in the commercial real estate space, based on long-term performance, and CRE is an excellent store of value for investors, he said.

"Early in the pandemic, there was a move to multi-housing and industrial, and record liquidity went into those sectors," Gibson said. "That created an incredibly competitive environment in those two sectors."

There is now an investor rotation into other asset classes, especially office, Gibson said.

"Office is a favored asset class at this point, because the pricing delta for what you can achieve with a well-located office property versus in-favor properties could be 300 to 500 basis points in current yield," Gibson said.