"As our clients and tenants return to the office, we’re seeing the crucial role real estate plays in the recruitment and retention of top talent."
- Michael Divaris, President and Chief Operating Officer of Divaris Real Estate
Real Estate as an Amenity
The best workplaces consider the employees who use them, and provide the amenities needed – forget the bean bag chairs, ping pong tables and napping pods. An employee-informed approach to amenities considers the culture, environment, and the unique worker experience knowing that it goes hand in hand with productivity, retention and recruitment.
The US Bureau of Labor Statistics most recently reported 11.3 million open jobs, putting qualified workers in high demand. Employees expect an experience, convenience, and a space that feels perfectly positioned as they decide where and how they are willing to work.
Town Center is an example of a mixed-use development that has employed an amenity approach.
In commercial real estate and in the recruitment of top talent, we see for ourselves – and for our office tenants – the attractiveness of the mixed-use center as an amenity. Mixed-use projects lure people back to the office and recruit newcomers with the opportunity to live, work, play. Walkable sandwich shops, gyms, happy hour bars, and upscale restaurants offer employees a reason to leave the sweat pants and sofa off their workday agenda.
As an anecdote, Town Center of Virginia Beach, a mixed-use center in the city’s Central Business District, reports full capacity of nearly one million square feet of office space with future plans to expand.
The Resurgence of the Suburban Office Park
And, mixed-use and downtown offices aren’t the only location-based amenity. We’re seeing many things, like a renewed interest in suburban office parks. They’re often close to home, close to interstate access, and offer ample parking. Office parks are really making a comeback as workers reconsider their commute. At different stages in life a 45-minute drive to a downtown office isn’t as exciting as the 10-minute drive to the office park and lunch breaks at home.
Suburban office parks are seeing renewed interest.
Density Discomfort
It’s called density discomfort. Now that aerosols, social distancing and contact tracing have become a part of office-jargon, we won’t choose dense, high traffic areas, cramped cubicles and crowded conference rooms. Tenants seek defined spaces, inviting common areas, Zoom rooms, and of course space for collaboration and socializing. All of this accounts for more square footage per person.
Harvard Business Review states, “An emerging norm is three days a week in the office and two at home, cutting days on site by 30% or more. You might think this cutback would bring a huge drop in the demand for office space. But our survey data suggests cuts in office space of 1% to 2% on average, implying big reductions in density not space.”
Reductions in time in the office isn’t necessarily leading to reductions in office leasing.
The mass reduction in office-workers is not necessarily translating to massive downsizing. In our markets as tenants renew leases or reconsider their office needs we have seen some downsizing, but as the study suggests, not much at all. Further, we are able to shuffle around our office tenants, as their needs change, keeping square-footage leased and office tenant requirements at the forefront.
As thought leader Simon Sinek eloquently states, “Trust isn’t formed in meeting rooms or on conference calls; it’s built when we’re able to connect on a personal level in-between and outside our normal work obligations. That’s why it’s even harder for virtual and remote teams. It is crucial that we create spaces, virtual or in person, that are dedicated to simply spending time together.”