This month's newsletter will include major city companies' push to fill their offices, the exploration of different hybrid models, and making the return to in-office less of an inconvenience.
We hope this content is helpful as you navigate your return to the office plans and flexible work.
Stress Builds as Office Building Owners and Lenders Haggle Over Debt by Matthew Goldstein, Julie Creswell, and Peter Eavis (NY Times, subscription needed)
Covid-19 has had lasting effects on the health of banks and our cities. With 50% occupancy the new normal for many downtown areas, many commercial real estate organizations are struggling with capitalization and financing. This article gives the details on the way big cities like New York and Chicago are struggling to have their office spaces filled.
Highlights include:
- Office districts in nearly every U.S. city have been under great stress since the pandemic emptied workplaces and made working from home common. But in recent months, the crisis has entered a tense phase that could damage local economies and cause financial hits to real estate investors and scores of banks.
- Mr. Rechler’s company, RXR, recently stopped making payments on a loan it used to finance the purchase of 61 Broadway in downtown Manhattan. His company got its original investment in the building back after selling nearly half its stake to another investor several years ago, he said. He added that the lender, Aareal Bank, a German institution, was considering selling the loan and the building.
- Though many workers have returned to offices at least a few days a week, 18.6% of U.S. office space is available for rent, according to Cushman & Wakefield, a commercial real estate services firm, the most since it started measuring vacancies in 1995.
Spring 2023 U.S. Occupier Sentiment Survey (CBRE)
According to CBRE’s spring survey, a majority of employees are saying their companies are requiring a return to the office, the percentages varying by field. The survey done by CBRE shares how employees feel when debating between in-office or working remotely.
Highlights include:
- 67% of respondents would rather be fully in-person or fully remote, as opposed to a hybrid environment. 45% of respondents to this survey supported a mostly or fully in office environment and 22% supported a mostly or fully remote culture. Employees want a clear policy on office attendance.
- 65% of respondents said that their company has some level of in-office requirements, and only 30% of companies have a voluntary return-to-office policy. Out of the companies that do have that in-office requirement, only 57% are actually tracking attendance.
- Smaller companies have higher percentages of office attendance as opposed to the office attendance of larger companies.
Return-to-Office Full Time is Losing. Hybrid Work Is On the Rise by Alana Semuels (Time)
As being in-office full time is dropping, having a hybrid schedule is becoming more common for those companies who are making the switch back from working remotely. This article shares how hybrid work differs between companies and the frequency used globally.
Highlights include:
- In the second quarter of 2023, the number of people in the office full time has decreased by 49% in comparison to the first quarter, where hybrid work has increased by 20% in the same time period.
- While office occupancy before the pandemic was 99%, occupancy currently sits at only 49% as of May 10, 2023. This is also caused by hybrid work in general, where the average minimum days required is 2.53 days per week, with Tuesday being the most popular day required.
- Companies like Tesla and Twitter both require full-time in office attendance, and Disney requires employees to go into the office four days a week. Apple has been tracking employee attendance and is threatening action against staff who are not meeting their requirements.
BlackRock Bumps its in-Office Requirement to 4 Days a Week by Dan Ennis (HR Dive)
In order to encourage team collaboration and education, companies like Blackrock are moving to have people in the office 4 days a week. This article explains the benefits of being in office and the reasons Blackrock and other companies are moving to the hybrid model.
Highlights include:
- “When fast-moving, high-client-interest events are happening, having our teams physically together to find solutions, seize opportunities and learn from each other makes a difference,” Goldstein and Heller wrote Tuesday.
- “Our leaders play a critical role in reinforcing our culture and running our businesses,” the bank’s operating committee wrote. “They have to be visible on the floor, they must meet with clients, they need to teach and advise, and they should always be accessible for immediate feedback and impromptu meetings. We need them to lead by example.”
- BlackRock’s push against remote work comes as office occupancy in New York City stands at less than 50%, the Financial Times reported, citing statistics from Kastle Systems.
An additional article that may be of interest is “Scoop: World Bank’s return-to-office plan sparks staff pushback” by Shabtai Gold (Devex), which features the Washington headquarters of the World Bank’s experience shifting from work-from-home to back-to-office.
Navigating Your Return to the Office: Our Favorite Reads by Rakshitha Arni Ravishankar (Ascend)
Exclusively working in the office or working remotely can be taxing on people’s mental health for different reasons, pushing many to encourage the hybrid model. This article suggests the ways workers can utilize both to the fullest extent, making problems like the taxing commute or at home workload easier and beneficial.
Highlights include:
- A survey conducted earlier this year shows that the number one reason people prefer hybrid work is because it allows them to avoid commuting. Employees want a more flexible workplace that values their well-being. But we also know that working from home hasn’t necessarily improved our mental health. Research suggests that our job satisfaction and general mental health have continued to deteriorate in the remote workplace. This burnout can be a result of us missing human connection.
- The truth is that the purpose of “the office” is changing. It’s no longer just a place to work. It’s a space to gather, meet people, and collaborate. Our commutes are changing in sync. Traveling to and from work is no longer a ritual we must do to be productive. It’s a way to infuse balance into our days.
- Most importantly, how and when we commute helps us draw work-life boundaries. We can separate work from home and switch “on” and “off” in a more tangible way.
2023 Occupant Experience Ideabook
With hybrid in full swing, we are seeing the need to "earn" employees back into our offices and facilities and experience is critical. This year's Ideabook goes into how we can improve the overall experience for occupants in our buildings and the people doing the work to provide that experience.
From amenities to workplace design to improved operations and technology, there are 16 innovative ideas from industry experts.