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National  + Office  | 
JLL Reports Orange County Office Leasing Remains Active Despite Headwinds

Rate of Inflation Makes Impact on Corporations’ Real Estate Decisions

The high inflationary environment is having an impact on corporate real estate decision making, according to a CoreNet Global survey released Friday. Sixty-two percent of survey respondents from all global regions say the current rate of inflation is impacting their real estate decisions in one way or another.  

Of those, 54% are consolidating locations, while 42% are reducing the size of the leases they’re signing, 41% are looking for more cost-effective buildings and lower rents, 37% are signing fewer leases and 34% say annual escalations are 100 basis points higher than normal. 

While nearly 60% of the respondents say that their company is in growth mode, 75% expect the U.S. economy to slip into recession by the end of 2023, and 72% say the same for the global economy. 

The question of how soon office-using employees will return to their employers’ leased space post-pandemic remains open. In a separate CoreNet Global survey conducted for CBRE, 58% of senior leaders at 176 U.S. and Canadian companies said employees were working in the office less often than managers expected. 

That in turn raises the question of what managers are doing about it. The survey found that 36% of companies have set corporate expectations for office attendance, 25% have allowed managers and teams to set attendance expectations and 19% haven’t set guidelines. A further 16% have allowed a combination of managers and employees together to set the guidelines and 4% have left the decision to employees. 

Most companies encouraging employees to come into the office are using “fairly passive” methods of doing so, CBRE says. Sixty-two percent are simply sending memos to employees about policies and expectations for office attendance. 

“To change organizational behavior, companies need to focus on creating new practices and implementing new tools to help drive a new normal,” said Julie Whelan, CBRE global head of occupier research. “This is less about iterating on what was. It’s about working to change behaviors based on a new set of norms and principles.” 

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Inside The Story

CoreNet GlobalCBRE's Whelan

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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