In the middle of an unprecedented pandemic, the 2021 office market is still uncertain. Real estate owners don’t know the full extent of the impact COVID-19 will have on the future of office leasing. Remote work, social distancing, stay-at-home orders, and a focus on sanitation may transform the workplace and the nature of work drastically, but it is too soon to know just how much of an impact it will have.
Although the current state of the modern office is unpredictable, many businesses continue to lease office space. Let’s take a look at some of the office leasing trends for 2021!
Accelerating Technology
For many companies across the world, COVID-19 has accelerated their digital maturity. Businesses reluctant to embrace digital transformation have had to reevaluate their internal processes and redefine job roles and skills to include the use of new technology. The ever-increasing digital revolution and the IoT have heightened office tenant expectations for updated infrastructure that accommodates the latest advancements in technology. These advancements may include smart building software to improve operational efficiency of a building.
Rise of Coworking and Shared Office Spaces
As the number of freelancers, entrepreneurs, and remote employees in the workforce increases, coworking and other flexible workspace options will become more popular. These spaces offer business amenities, such as WIFI connectivity, printers, a shared kitchen, and free coffee and tea. Coworking spaces often focus on building a supportive community for members, where you can network and be held accountable.
Suburban Market Rise
Suburban markets are expected to recover from the Global Financial Crisis faster than their central business district counterparts. Urban office markets have seen a more severe downturn throughout the pandemic due to logistical barriers posed by COVID-19 to higher downtown occupancy. These include disruptions to public transportation, which many urban employees use for commuting to and from work. Some businesses may end up shifting their urban offices towards the suburbs.
Decreasing Space Demand
The largest impact of COVID-19 on the office sector is undoubtedly the shift toward remote work. Although government restrictions have eased, many companies have still yet to return to the office. Many plan to return gradually, and when they do return, they are likely to move toward hybrid workplaces, which require less office space.