Executive office with dark wooden desk, Tanned Leather office chair and dark lounge chairs in Nordic Dark

A shift that could prove an opportunity for landlords

The fundamental shift of the way we work, speeded up by the covid-19 pandemic, could create new opportunities for landlords – for those willing to adopt the necessary changes. “In order to get tenants back to their offices, landlords need to differentiate and customize what they offer”, says Steve Sanderson co-founder of the real estate and building technology company CASE, and previously global head of operational strategy and product operations at WeWork. “Key will be offering solutions that are both flexible and sustainable”, he says.

For as long as offices have existed, there has been discussion about the ideal structure. One thing is certain, however, and that is that future corporate workspaces will look and operate in fundamentally different ways from how they have in the past. Our world today is mashed up and multifaceted, with borders and barriers becoming blurred at all levels. Internet of things, connectivity and big data are cutting us loose from geography making it possible to move freely. Technology has dramatically changed where, when and how people work – a trend that was reinforced during the covid-19 pandemic.

- Working from home will probably continue - but so will office life, too. Most people need the social aspects of a workplace. The challenge lies in how to adapt workplaces so that they live up to future requirements, says Steve Sanderson.

Shorter leases

Another factor contributing to the need to rethink offices - that is arguably just as influential for the working world - is the rising price of commercial real estate. As the cost of traditional 10- to 15-year office leases has ticked up worldwide, corporate tenants who want to be able to scale quickly are turning to shorter and less costly 1- to 5-year leases where they can add (or reduce) square footage at a much faster pace. As a result, flexible and co-working spaces are now the fastest-growing type of office space in commercial real estate.

- The traditional office is slowly disappearing and successful landlords have to be open to offer many different workplace solutions. Few companies will accept being trapped by 10-year leases in office environments that may not suit them size- or design wise next year, or even next month, says Steve Sanderson

- Meanwhile, companies need a dedicated space that reflects their brand, where employees are proud to work and customers are delighted to visit, he continues.

Rethinking office space

Tech giant Microsoft trialled a four-day working week last year in Japan, deemed successful in terms of employee feedback and productivity. It says it now has a "hybrid workplace strategy as worksites slowly start to open". Facebook has said it plans to shift towards a more remote workforce as a long-term trend with working “hubs” across the US, while Mastercard said it is currently looking at consolidating some of its offices. A shift towards more remote working also allows companies to rethink their expensive office space.

According to Steve Sanderson, the solution for landlords lies in offering flexible work environments easily adapted to the changing needs of a company.

- When WeWork was founded in 2010, our primary focus was to provide freelancers and entrepreneurs with an environment that allowed them to engage with and benefit from a network of like-minded businesses, all in a setting that encouraged innovation and collaboration.

- Before long, some of the largest companies in the world started coming to us. They recognized there was a fundamental shift in the way people are working and living. Today’s employees are more mobile and more flexible, and want to work in environments that allow them to thrive personally and professionally, he says.

Sustainability key aspect

If flexibility is one of the key aspects to consider for landlords, so is sustainability. This means investing in basic office furniture solutions that can easily be adapted to reflect both the brand and the needs of each new tenant.

- The tons of office furniture that were tossed away every time a new company moved in is hopefully a thing of the past, he says.

- The office furniture market has been a bit like the fashion industry, where people haven’t really been caring about the environmental footprint of their consumption. But with a sustainable mindset and reusing furniture and office solutions, landlords will be able to offer solutions that benefit the planet, while being cost-effective, Steve Sanderson says.