One of the biggest challenges facing corporate real estate, right now, is figuring out what to do with traditional office spaces. Whether the pandemic comes to a close or not, and even with the economy opened back up, offices just aren't being utilized the way they used to be. A lot of things happening in the corporate real estate world are responsible for that change.
Some companies have condensed their real estate portfolio, for whatever reason, and abandoned ship, swimming towards co-working or full virtual work styles. In a March 24 survey, published by Pension Real Estate Association, 74% of respondents indicated that they have shelved CRE investment plans, while 63% are worried about uncertainties in property appraisals. What's more, thanks to the pandemic and social-distancing requirements many hotels, shops, malls, offices, and co-working or living spaces have been closed.
Others, like Google and Amazon, have pushed forward, continuing to grow existing plans, prioritizing the megacampus or smart campus. The aim is to bring employees back into the fold but in a more urbanized, work-city format. Technology is at the heart of these operations.
However, the majority of organizations have maintained properties — or are trying to do so — focusing on reconfigured spaces so they're more flexible and support the new hybrid formats and workforce. That includes doing things like removing desks or workstations, adopting shared desk models, reducing on-site capacities, and opening up more collaborative or communal spaces.
This massive surge or shift in the way corporate space is being used has forced industry proponents to look to technology for help. They are increasing their digital footprint to provide smarter and more contextual experiences. Property and site managers are looking for new, and innovative ways to utilize these facilities and leverage open spaces. A telling 85% of CRE decision-makers feel that technology is important to return-to-work planning, with nearly 50% of respondents saying that it's "very important."
What Offices Are Doing with Extra Space
Remote work, flexwork, and hybrid workplaces are here to stay. It doesn't matter whether executives want it to be so or not. Employees are demanding the opportunity to work from home or remote locations at least some of the time. This changes the way that properties are being used, or rather how they're being structured.
A key goal for existing office space is to make sure it's truly flexible. Not only should it appropriately serve the changing needs of the new-age workforce, but it must be able to expand and contract to accommodate population transitions. There may be days or even weeks where capacities are higher than normal, followed by lulls in demand where fewer workstations or open spaces are necessary.
In turn, it means that site managers need more insights into the smart campus or office facilities. They need live, active, and real-time details about available space, reserved space, how it's being used, and much more. Even sanitation and maintenance calls for more nuanced insights into a location. Many have already embraced this. In fact, a 2021 outlook report from Deloitte found that 43% of companies are increasing tech investments this year, and 26% are maintaining tech investment allocation from 2020.
Moving To A Shared Desk Model
When you move to a shared desk or shared space model, there must be a shift in perspective. Desks and workstations are no longer allocated 1:1, which is perfectly fine because not all of the workforce will be on-site and even out of those that are, not everyone will need an individual space to work. Compare this to more traditional office structures where every desk or workstation is assigned, regardless of where the professionals spend their time.
It's not just the administrators and managers that need to change perspectives either. Proper communication from the higher-ups will help employees and tenants understand how to embrace these shared desk models. At least to start, these teams will need support during the hybrid transformation to come. The average tenant experience is going to be wildly different going forward.
There is a right and a wrong way to do it, and with the support of mobile apps, NFC, sensors, and a connected workplace system (IoT), everyone has better access to information and controls. Anyone can see and identify what spaces are available, which are ready to be used, and which are out of commission currently. Other important factors include how many spaces or offices are active across the total inventory, what amenities each room has, and have they been cleaned or sanitized? It calls for digitized, smarter, and more data-driven venue operations.
Traditional office and corporate real estate setups just don't support these kinds of programs. The same Deloitte survey from above revealed that 82% of companies have seen exposed shortcomings in technology infrastructure as a result of the pandemic. A further 95% of respondents aim to improve internal technology capabilities to keep up with the evolving workplace.
For operations and commercial real estate, technology also yields better insights into what works and what doesn't, ultimately enhancing control of the desk and conference room inventory, and providing a deep dive into space usability. Maybe there's a room that isn't effective for leasing or certain activities, for example? Removing that space from the inventory, and finding a suitable alternative can be done quickly and easily if the right technologies are in place.
Technology's Role in CRE Return To Work Strategies
Like we see in many industrial applications, technology has a role to play not only in facilitating return-to-work programs but also in maintaining the new normal. How can corporate real estate teams utilize various solutions to support clientele and improve the tenant experience?
Tenant Engagement - Creating an ecosystem for other services and amenities is critical. As employees, tenants, and clients come and go, having access to on-site perks, locating amenities, and understanding the property is beyond helpful. Imagine being able to see, at a glance, where nearby restaurants and cafes are, or where departments are situated, or even where on-site or virtual events are taking place?
Real-time Communications - Because people will be more spread out, as a result of the distributed workforce and hybrid models, it makes sense to increase transparency. Communications are a huge part of that and technology will bring them to the forefront of every property or corporate venture. Alerts, SMS messages, mobile notifications, will all play a pivotal role in keeping workers informed and tapped into location-based events.
Indoor Mapping - As spaces are transformed, and people shuffle between different offices, floors, and buildings, there will be a greater need to accurately track everything. Indoor office mapping will mean the difference between locating desks, conference rooms, and workstations and identifying their availability. Future offices will be flexible, available on-demand, and they'll be tapped into a digital grid or network.
Mobile Services - What's a device or platform that just about everyone has access to? Mobile, or smartphones. Unifying all of these technologies and experiences by providing a mobile ecosystem is critical to keeping everyone engaged, involved, informed, and properly supported. The so-called smart campus app is critical to these kinds of digitized and data-driven operations.
In a MetaProp survey, 94% of investors claim that COVID-19 will continue to accelerate the adoption of CRE and PropTech technologies, which is up 5% from the mid-year survey. Another 76% of respondents say they expect to see increased acquisitions over the next 12 months, which is up 63% from the mid-year survey. Finally, 65% of investors expect to see more pitches from PropTech startups over the next year, compared to the previous year.
What Should CRE Expect In the Future of Work
What's most important when shifting properties and workspaces for the workplace re-entry, at least for CRE administrators, is to provide a safe and secure experience for tenants, clients, visitors, contractors, and vendors. You cannot achieve this without a holistic and effective approach that touches upon the more demanding CRE operations.
Of course, the next phase of growth — beyond the adoption of modern technologies — is to develop corporate strategies at scale, accruing continual ROI from technology and end-users across these types of programs.