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    June 15, 2022

    How Hybrid Workers are Impacting Office Building Development

    The way we work is changing. And as a result, the real estate development landscape is changing too.

    With more and more businesses embracing hybrid work models - which mix remote and in-office work - the demand for office space is shifting. And that means office building developers must be aware of these changes and adjust their strategies accordingly. 

    The Shift Towards a Hybrid Working Model

    In the past, most workers were based in a single location - usually an office - and would commute there daily. But as a result of the pandemic, more and more businesses are embracing hybrid work models.

    Under a hybrid work model, employees can work remotely, in an office, or a combination of both. This flexibility appeals to workers, who value having more control over their schedules and choosing where they work. 

    For businesses, it can lead to increased productivity and creativity. In a recent study conducted by employee productivity monitoring company, Prodoscore, after evaluating over 105 million data points from 30,000 U.S.-based Prodoscore users, there was a five percent increase in productivity during the pandemic work-from-home period. The win-win scenario for businesses' productivity, expenses, and employee well-being would indicate that the hybrid model will stick around for the foreseeable future, leaving offices half empty. 

    According to Bisnow, the demand for office space across the country fell 1.5% in April compared to March. Bloomberg recently reported that nearly half of all office visits this year were once a week.

    This shift towards hybrid work models significantly impacts office real estate development.

    [Ebook] Discover the data that’s necessary to bring complex real estate  projects in on time and under budget.

    Demand for Office Space is Changing

    The demand for office space is shifting due to the move toward hybrid work models. While businesses still need office space for meetings, collaboration, and events, they now require less space per person. As a result, companies are looking for smaller office spaces or choosing to downsize their existing office space.

    According to Bloomberg, in the four months before the pandemic, once-a-week office visits made up about 21% of all office visits. But in 2020, office leasing activity in major U.S. cities declined by 29% compared to the previous year. Now the number of people coming into the office five days a week has flipped.

    VTS Chief Strategy Officer Ryan Masiello told Bisnow that "To continue to recover, the core office markets with higher rates of remote-friendly tenants will need to attract more diverse tenants and be willing to adapt their spaces to meet the needs of tenants who are not planning for their employees to come back into the office full time."

    Understanding what's driving hybrid work model success is paramount to delivering successful projects.

    The Decline of the Private Office

    The decline of the private office is another trend impacting office building development. As more businesses embrace hybrid work models, there's been a shift from traditional, private offices to co-working spaces. 

    Instead, businesses are opting for open-plan layouts or co-working spaces. This trend is driven by a desire to create more flexible and collaborative work environments. Ian Ross, the founder of SomeraRoad, told Bisnow. "The bottom line is a generic, antiseptic, commoditized office: Good luck. A boring office doesn't work."

    Bisnow also states that businesses are looking for better quality spaces for shorter-term leases of three to five years, cutting down on space as they try to predict how many people will want to come into the office.

    It's also driven by a need to reduce costs, as open-plan layouts and co-working spaces are often more affordable than private offices.

    The Impact of Hybrid Workers on Office Building Development

    With GlobeSt. reporting that 43% office occupancy is the "new normal" nationwide, office building developers feel the burn.

    As mentioned, developers must pay attention to these trends and position buildings to be unique. This doesn't mean stacking on amenities or getting overly creative with your space. Paying attention to how an office can truly benefit a worker and be a better option than their home office will be critical as office building projects move forward.

    Ross tells Bisnow that office incentives, such as outdoor space and fitness options, are not certain to be luring workers back long-term. He stated that offices have spent years installing workout facilities that employees barely use, but one feature that seems to be the biggest draw to the office is a workplace's tech setup.

    Businesses can afford higher-end technology than most are willing to invest in for their home offices. Building technology that seamlessly improves the worker's life in the office is an excellent way to add more value to the in-office experience. This could be anything from a superior desk set up with high-quality monitors to flexible standing desks. The highest quality wi-fi and better collaboration tools will also help to solve common remote work issues and provide clear benefits to being in the office. 

    How to Set Office Developments Up for Success with Real Estate Development Software

    The office market is changing, and developers need to be prepared. Understanding the trends and taking advantage of real estate development software can set your project up for success.

    Real estate development software helps you manage every aspect of your project in one centralized location. This includes budgeting, scheduling, and tracking progress.

    It's essential to fully understand your project budget in pre-development, especially in unpredictable market conditions. Once expenses start rolling in, having a real-time feed into your project costs is critical to making key strategic decisions that keep costs low. Northspyre offers real-time project dashboards that keep stakeholders in the know and increases visibility for project managers. Northspyre's AI helps your team track budget lines and highlights potential problems before they become significant budget overruns and delays.

    As material costs increase, inflation rises, and demand for offices dwindles, it's vital that every expense is strategically managed and every potential budget-saving decision is made. Northspyre is critical in allowing you to do just that. 

    By understanding the trends impacting office building development and using real estate development software, you can still set your project up for success.

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