When it comes to choosing office space – whether renewing, downsizing, or looking for new ones – Jason Wurtz, executive vice president, office services, NAI Hiffman, says to GlobeSt.com that market activity is improving as companies can no longer delay decisions.
“Time is running out and short-term decisions can only be dragged out for so long,” he said. “Companies are increasingly confident about how they will operate in the future.
“With other natural expirations and ‘pushed cans’ since 2020, there is very minor pent-up demand appearing as growth from the low.
“Going forward, as more companies get the right size, we will see activity in the market as companies reduce or increase their space, although it will be some time before we We see positive net absorption.”
From region to region and from building to building
On the other hand, Giovanni “Gio” Cordoves, Western Regional President at KBS, tells GlobeSt.com that it’s difficult to paint a picture of the return to power with too broad a brush because it varies so much from region to region and even from building to building. building.
“It depends on the underlying tenants and users of a specific space,” Cordoves said. “Nevertheless, the overall return to work is stable and even rising in some markets, with many Texan markets continuously leading the country, according to Kastle data.
“However, in our office portfolio, we are seeing an upward trend in our south-east properties, with physical occupancy averaging 75% in September and even higher mid-week.
“Companies are increasingly recognizing the importance of having their teams on site, and workers want to spend more time in the office than they did at the start of the pandemic.”
He said office hours promote collaboration and a positive company culture and help facilitate training and mentorship for new employees, which leads to higher productivity and success.
Companies and employees eager to complete their return to the office
Jonathan Bennett, president of AmTrustRE, told GlobeSt.com that the pandemic has proven that it’s viable for people to work from home, even if it’s not optimal.
“For most employers, office space remains critically important, and it’s no surprise that we’ve seen a steady increase in demand (both visits and enquiries) for share of companies from all walks of life, including big tech, e-commerce, legal and government services,” Bennett said.
“As we continue to move towards normality in the wake of the pandemic, businesses and employees are eager to complete their return to the office.
“At the moment, the demand is particularly strong for spaces offering a better location and more extensive equipment. These better-positioned assets are likely to experience the greatest increase in demand because they not only meet the space needs of companies and their management teams, but also the desires of employees.
“More and more people are looking to move out of their homes and into new spaces – not just for a change of scenery, but for the benefits of in-person collaboration and the productivity and creativity offered by a working environment. professional and highly appointed office. .
Startups looking for space
Newmark Vice President Elizabeth Hart told GlobeSt.com that demand for space from promising start-ups is on the rise.
“While start-up companies’ demand for additional space has plateaued, their office occupancy is trending up, and we predict this could lead to growing demand in 2023,” she said. declared.
“The demand for R&D continues to increase, particularly for purpose-built spaces due to the unique needs of many potential tenants.”