Innovation in Office Sector Only Going to Accelerate Post-COVID

The innovation trend that emerged in the office sector prior to the coronavirus is only going to accelerate as organizations adapt to changes in how workplaces operate in a post-pandemic environment, according to Julie Whelan, head of occupier research for the Americas at CBRE.

Whelan told the REIT Report July 24 that innovation will be accelerated in large part by the success of the remote work model during the crisis. “The office is now becoming just one place among a network of locations where work gets done, so of course the role of it is going to accordingly change,” she said.

Prior to COVID, organizations were moving to models that were less hierarchical, less routine- driven, and more project-driven—all of which requires collaboration, Whelan said. Going forward, the conflict between the need for collaboration and increased remote working will spur innovation in terms of the tools and technology that are used every day, and how physical workspaces tie the physical and digital together to drive seamless interaction, she noted.

Among some of Whelan’s other observations:

  • The disparity in pricing and vacancy levels between “really great space and lower class space” will continue to grow as tenants become much more discerning.
  • A CBRE survey of 126 global companies shows that organizations are focusing on time-sensitive, tactical decisions like lease renewals. Decisions related to longer term changes are on hold.
  • 70% of companies surveyed see a future for full-time remote work. “A lot of organizations realize that what this COVID era is doing is pushing them to loosen their expectations of employees and those expectations to come into a physical office every day.”
  • Flexible office space has been hurt by the pandemic, but the survey shows “there’s still a strong need to use that space.”
  • Suburban and satellite office space will be particularly conducive to geographies with onerous commute times.