The Commercial Inspector Blog Posts

What Do Office Spaces Look Like In 2023?

WHAT DO OFFICE SPACES LOOK LIKE IN 2023?
 December 21, 2022 |  Investment, CRE News, Management |  real estate trends, office space, commercial real estate tenants

Over the past few years, commercial real estate has been through the ringer. Relying on data-driven, easily predictable trends has been much more difficult for investors and property owners. Although plenty of uncertainty remains as a hindering force for office spaces, workers are making their voices heard. In the future, property owners will need to adjust their strategies in order to capitalize on the best tenants. While many investors are opting to diversify their holdings through multifamily conversions, the key to succeeding with office spaces in 2023 could be more about specialization and adaptation.

Identify The Purpose Of The Office Space
After work-from-home mandates transformed the way employers and workers viewed the workplace, the standing of office properties within the market has been less stable. While the realities surrounding office spaces vary depending on location, the truth is that most property owners still see their tenants using their offices in the traditional manner. For the most part, the old-school 9-to-5, 5-day workweek is still the standard.

However, as reported by JLL Technologies (a leading voice in PropTech), 84 percent of property management teams see a portion of their tenants using a hybrid work model. Class-B and C office properties are projected to continue seeing a downturn in demand throughout 2023, but investors can target this new portion of tenants to supplement any lost business.

The modern office recognizes the new standards of workers, offering enhanced flexibility as a priority. For these flexible businesses that offer hybrid work experiences, the office space serves a more targeted role in cooperation with the home office. The home office is where workers go to catch up on work and concentrate, while the office space is where workers go to collaborate.

CNBC interviews human resource expert Scott Dussault on the future of office spaces as a result of these effects. He states, “You’re going to see a lot more open spaces…meeting rooms, break areas where people can sit and get together. It’s going [to] be focused on connection…making those connections more meaningful.”

Prioritize The Tech, Not The Fads
Office spaces may become more of a collaborative space than in the past, but property owners who are buying into the “social space” fad, may need to reexamine their strategies. Particularly prior to the pandemic, high-end office spaces offered perks like gyms and complimentary grocers. According to recent studies, these luxury amenities may not be the best way to satisfy office workers.

Analysts at Commercial Observer have found that, while 81 percent of office workers were frustrated by their office working experience, the top sources of their frustrations were related to a lack of sufficient technology. Office spaces have always been widely criticized for lagging behind on adopting new tech into their offered amenities. The modern office worker seems to simply want the ease of productivity experienced at home to be replicated within the office.

Things like property-wide WiFi should be standard, along with remote conferencing options. Additionally, expanding the options regarding lighting and temperature control will go a long way to secure valuable tenants.

In a field like commercial real estate, certainty comes at a premium. With the rapid shift in office space expectations, it is of little surprise to see investors and property owners employing their wait-and-see policies. Still, to get the most out of their investments, property owners can take advantage of the latest projections to get a leg up on the competitive market.

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