Office Tenants, Landlords Take Divergent Views of Occupancy Outlook
Seventy-one percent of commercial occupiers surveyed by MRI Software and CoreNet Global say the mass shift to remote working during the pandemic has fundamentally changed their long-term approach to space usage. Yet, a comparable majority—69%—of landlords expect no lasting impact from COVID-19.
The survey results point to a mismatch in perceptions in other areas. Tenants surveyed by MRI and CoreNet are targeting the fourth quarter for a majority of their tenants to be back in the office. Ownership respondents took a more optimistic view, expecting Q3 will see a broad return. It follows, then, that landlords believe a higher percentage of occupants’ employees are already back onsite than the occupants themselves say there are.
Fifty-six percent of occupiers say they’ll need less space, with the vast majority expecting fewer employees onsite at any one time. Meanwhile, 60% of landlords see their tenants continuing to lease the same amount of space, with only 33% projecting a decline.
None of the tenants surveyed said they would seek more space to enable a lower workplace density, and just 3% anticipate leasing extra capacity to allow for additional collaborative areas once remote workers start coming back to the office.
“Many of the findings were expected, but the differences in outlook between commercial occupiers and their landlords were particularly surprising,” said Brian Zrimsek, industry principal at Solon, OH-based MRI Software. “The good news is that both tenants and real estate owners see the benefits of bringing the workforce back into the office. Together, they now have an opportunity to align their approaches and partner to ensure that employees work even more effectively and safely as their companies adapt to new standards, practices and configurations.”
One area where both corporate occupiers and landlords are on the same page is the need to adopt technologies to handle changing requirements as the pandemic abates. Even those who are confident in current capabilities planning to extend their existing set-ups and/or deploy new workplace management tools.
Survey results show that 83% of occupiers and 64% of landlords plan to adopt new technologies, while 77% of tenants and 68% of building owners/operators intend to expand their current solutions.
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