Survey Finds Only 9% Now Plan to Significantly Shrink Their Office Portfolio, Down From 39% Last Year
85% of Companies Expect Workers to Spend at Least Half Their Time in the Office
Salt Lake City – June 11, 2021 – CBRE’s new survey of U.S. companies found that most have cooled in recent months on making big cuts to their office portfolios, as many now plan for their offices to support collaborative work best done in person rather than remotely.
CBRE’s Spring 2021 Occupier Survey included responses from 185 U.S.-based companies. Forty-one percent said they intend to return to a steady, relatively normal state of office use in the third quarter, and 20 percent have targeted the fourth. Twenty-three percent report they already have returned.
They’re now planning their return after months of contemplating the office’s role in their organizations in the wake of COVID-19 and determining the amount of office space needed to accommodate group work, meetings and other in-person activities. The latest survey found only 9 percent of large companies anticipate their office portfolios will get “significantly smaller” over the next three years, whereas that figure was 39 percent in CBRE’s previous survey last September. Meanwhile, large companies planning for modest office-space reductions grew to 72 percent this spring, up from 45 percent in September.
Smaller companies are more likely to keep their portfolio the same or grow it over this timeframe.
“Multiple factors support this sentiment, including the ongoing rebound of the U.S. economy and companies’ realization that they need to retain more office space than they previously thought,” said Julie Whelan, CBRE Global Head of Occupier Research. “Many companies now recasting the design and function of their offices will find that the square footage needed to accommodate team-centric work, free-address seating and meeting space often exceeds that previously dedicated to rows of individual offices and cubicles.”
Remote work will remain a fixture, but most companies anticipate employees will spend at least half of their time in the office, the survey found. Specifically, 38 percent said workers will spend three or more days a week in the office; 32 percent anticipate an equal mix of in-office and remote work; 15 percent foresee solely in-office work; 7 percent say workers will do most if not all of their work remotely; and 7 percent aren’t sure yet. The figures don’t add to 100 due to rounding.
CBRE’s Econometric Advisors data science and forecasting unit anticipates that U.S. office-using workers now will spend an average of 1.8 days a week working remotely, up from 0.8 days a week prior to the pandemic. That will translate to companies using 9 percent less office space per worker. However, the impact on office demand will be largely offset in the coming years by increased hiring amid the economic recovery and evolving office floorplans that provide more room between workstations and ample space for group-centered work.
CBRE Econometric Advisors also forecasts that the U.S. office market will start its recovery in mid-2022 and asking rents will return to precrisis levels in early 2025, which marks a shorter timeframe than recoveries from previous economic shocks including the Global Financial Crisis and 2001 dot-com bust.
In the Spring 2021 survey, companies reported they intend to use more flex-office space – that leased on a shorter-term basis than traditional office leases – in their portfolios going forward. Flex space tops the list of most desired in-building amenities by companies in the survey.
Most Favored In-Building Amenities and Technology
|Most Favored Office Amenities (Large Cos.)||Most Favored CRE Technology|
|Shared Meeting Space||78%||Enhanced Video Conferencing||65%|
|Flexible Open Space*||75%||Smart Building Systems||33%|
|Flexible Office Space**||69%||Touchless Tech||31%|
|Connected Tech/Building Apps||66%||Occupancy Sensors||26%|
|Indoor Air Quality||63%||Air Quality Sensors||21%|
* Flexible open space are places that are highly configurable and adaptable to different design principles
** Flexible office space includes coworking, serviced offices, suites and other types of short-term space offerings
A summary of key points of the survey is available upon request.
Also on the future of the office: This week’s episode of CBRE’s Weekly Take podcast features top Brookfield executives discussing their outlooks for the office market and other commercial real estate. Listen on the Weekly Take website, Apple or Spotify.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company has more than 100,000 employees serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.