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Flexible Work Arrangements Continue Impacting Office CRE
Anyone accessing content about workplace preferences these days is likely to get an “all or nothing” feeling—or, as a recent report from McKinsey & Company put it, absolutist thinking.
Here’s how such thinking works:
- Prior to COVID-19, everyone was in the office every single day.
- During the pandemic, no one went to the office.
These days, offices are “packing up to the rafters yet again.”
However, McKinsey’s “Flexible Work’s Enduring Appeal Affects Workers, Employers, and Real Estate” indicated that the black-and-white beliefs weren’t true.
Referencing data from its American Opportunity Survey, the consultant’s report indicated that some work-from-home flexibility was in place before the pandemic. Not every workplace looked like a ghost town after March 20. Furthermore, while the AOS data indicates an uptick in those working on-site, “the change has been modest,” the report’s authors commented.
Given this, “in 2024, slightly fewer Americans were working fully remotely and slightly more were working fully on-site, compared with the AOS survey in 2022,” they added.
In other words, the current trends indicate that office real estate needs to shift from “before-the-pandemic” usages and designs to appeal to today’s workers. To reach this ideal, the McKinsey authors suggested that the real estate industry consider the following:
Upgraded offices. The report said that office design should provide support by offering technology, connectivity and sustainability. Employers are looking for space that attracts talent and enables collaboration.
Convenient locations. Employees who work remotely tend to live farther from their employers’ offices than those who are 100% on-site. One way to encourage the remote workers is to provide offices that prioritize well-being and collaboration. Additionally, locations near public transit are essential among employees, both remote and on-site.
Flexible leases. The authors also indicated that flexible leases should be in place to “support companies that need to test how much and what kind of space is most effective for them.” Such agreements can also encourage employers to test operating models that boost their competitive advantage.
- ◦Lease
- ◦Development
- ◦People
