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The office is dead, long live the office.

January 15, 2021 | by Jonathan Wasserstrum
Reviewed by real estate expert Jonathan Wasserstrum

“The king is dead, long live the king!” is a traditional proclamation when a new monarch takes the throne. The seemingly contradictory phrase simultaneously announces the death of the previous monarch and assures the public of continuity by saluting the next monarch.

The office is dead, long live the office.

I’ve heard that remote is the future. While remote work has its benefits, I’m here to tell you that it’s not the be-all and end-all.

To be clear, remote work doesn’t equal work from home. Squares and rectangles. All work from home is remote work, yes, but not all remote work takes place at home. For example, we at SquareFoot have a remote team located in Belfast. Guess where they work? An office. That they want to go into. So for the purpose of this piece let’s assume that there are two choices for work: “in an office” or “not in an office.”

There are two states to consider: What does work look like and feel like during a pandemic and what does it look like afterward?

The safety concerns around going to the office today. My bet is that offices post-COVID look a lot like they did before COVID… with some asterisks.

I hear that the most talented people want to work remotely permanently. I don’t believe that. Many talented people flock to major cities, and COVID won’t change that. While more can be done in the cloud today than in the past, humans are inherently social beings who want to interact with other humans. The density of cities provides citizens with cultural, educational, and entertainment options. And in the cities where many of them want to live, that same density leads to living situations that are oftentimes cramped and not conducive to WFH.  And if one is leaving their apartment to go work elsewhere, a novel solution for that problem would be an office.

Cities during lockdowns don’t have their usual benefits, though. As we witnessed, many people go elsewhere. If I can’t stay out at a  bar until 3 AM or go to a museum on a free Sunday, then why am I going to stick with my shoebox apartment paying $4k per month? Off to Tulum where every day is Taco Tuesday. It sounds like a great place to live for a few months, maybe even a year. But is that where you are going to raise kids? For most of us, the answer is no. Ultimately, we continue to want what we’ve always planned for and have pursued.

Unsurprisingly, the people who champion remote work sell that dream-like existence, and on the other end of the spectrum, those who own office buildings champion the traditional solution that we all remember. The answer is somewhere in between.

The future office is a hybrid model. Adapting to COVID over the past year has shown a lot of companies that the wheels don’t fall off the bus when everyone starts working from home. That does not mean necessarily that it is a better option.

As one ponders what the future of work and offices look like, the needs and desires of both employers and employees need to be taken into consideration.

There is no one-size-fits-all solution proposed yet, and I don’t imagine it’s coming any time soon. Some companies lend themselves better to being in person and others don’t. Some people prefer working in an office (hello, extroverts!) and others don’t (introverts don’t want attention drawn to them so we won’t mention them). Every organization is going to have to find its own “right.”

The variety of options and potential “right” solutions has increased considerably. Historically companies had one choice: “sign this 10-year lease.”  Then WeWork and their cousins came along and said “Hey, we will let you come here for a year.” And companies really liked that alternative option.

The nature of how companies are built has changed dramatically over the last decade, and it was high time for real estate solutions to change too. In 2018, JLL predicted that by 2030, 30% of office space would be flexible. COVID has accelerated that trend and unearthed other options that hadn’t yet really been considered. In 10 months, we’ve advanced in our thinking as an industry more than the 10 years prior combined. Now, we’re ready to forge ahead. So let’s entertain, as employers:

  • What does it look like if we are only in the office two days per week? Can I sign a two-day-per-week lease?;
  • What does a proper WFH setup look like? Many live in NYC (or another major city) — 400 sf apartments aren’t really designed for this way of living and working;
  • Employees have fled to a dozen different global cities. What if they decide to stay put, and where do they work if they don’t want to WFH there?

Team members, on the other hand, fall into three buckets:

  • I want to be in an office everyday;
  • I want to be in an office sometimes;
  • I never want to be in an office.

Will people in buckets 1 or 3 self-select into companies where that is the norm? Who knows. Said another way, where does “has an office” go on the list of priorities a potential employee weighs when looking for a new job? And what does it say about you on both sides of the equation if you opt to be fully distributed?

No matter where they land, all companies will have to be more flexible in their real estate strategies. And how they set up their offices changes depending on what the company census says about the three buckets. Folks who want to be in the office everyday need their own space and will be disappointed or frustrated if they don’t find it. For our “sometimes” friends you need additional desks, and that quantity will be dictated based on how many are 2-3 times a week and how many are 2-3 times a month. And are people really going to stand firm over time on what they committed to at the outset? Especially when they find out what’s happening at the office when they’re not around to be a part of it.

For many people, work is just a job. And there is nothing wrong with that. 

For others, it’s more, including a place to make business connections for your career and friends. At my job before business school, my team was mostly remote. Well before remote was cool. My boss and I sat in Washington, DC, while everyone else was scattered across the world. I worked on projects with people I have to this day never met face to face. And I’m proud of the work we did. But the people I still keep in touch with more than a decade later, however, were those who I sat nearby, even though they were on other teams. There’s a social benefit of the office that is not soon replicated. And I’ve witnessed it time and again throughout my career.

Everyone likes concrete predictions to be called out on later, so here are mine:

  • The office isn’t dead. Post-COVID, most companies will have most employees working out of an office most days;
  • Flexible space providers like WeWork will continue to be a growing part of the market;
  • Companies will use less office space in the hybrid environment. Demand drops and then prices drop, too. Then, at the margin, companies get slightly more office space. For example, offices in NYC are smaller than in other locations because pricing is higher. Pricing has a funny way of influencing behavior, and longstanding supply and demand principles have a funny way of influencing pricing;
  • Having a trusted advisor is even more important now than before. The variety of options and structures available to solve companies’ real estate needs have multiplied. SquareFoot would be happy to help! 🙂

A broader point that I’d like to end with: what’s right for you might not be right for others. There are countless permutations that live in between the most basic two frameworks. But this is a starting point for a longer conversation. People are too quick to extrapolate their views to be representative of what they assume everyone believes.” 

Let’s not turn the future of work into a culture war please.  Everyone can find what they seek; they just have to know to ask for it (and who to ask!).

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