As companies slowly (and in some cases, painfully) wean themselves away from the cubicle style of working, it should come as no surprise that the communal workspace model is quickly becoming a more mainstream trend.
Inspired by Californian tech firms, big office tenants are downsizing their spaces as they increasingly adopt policies for sharing non-dedicated offices and implement technology to support their employees’ ability to work anywhere and anytime.
According to Norm G. Miller, PhD, a professor at the University of San Diego, Burnham-Moores, Center for Real Estate, if office tenants used 20% less of the nation’s current office space, which has a total valuation of $1.25 trillion, that decrease in demand would represent $250 billion in excess office capacity.
This trend has long-term financial implications for office building owners and investors. But that’s not all. According to Miller, four major trends are impacting the commercial real estate market:
- Move to more standardized workspaces.
- Non-dedicated office space (sharing), along with more on-site amenities.
- Growing acceptance, even encouragement of telecommuting and working in third places, and
- More collaborative workspaces and functional project teams.
John G. Osborne, executive director, leasing and marketing at Bergman Real Estate Group in Iselin, NJ, states that the trend to shared office space is more prevalent among larger publicly traded companies than smaller firms. “The majority of our smaller tenants, those that lease less than 5,000 square feet, still prefer private offices than an open plan,” he said.
Curiously enough, there is a change in business culture going on concurrently, namely, the desire for more face-to-face collaboration and less telecommuting, especially in light of Yahoo’s recent announcement. Open floor plans and more common space are the antithesis of telecommuting. If companies are discouraging workers from working offsite, it looks like the addition of more on-site amenity space for employees seems to be the need of the moment, especially if they are expected to work long hours.
One of the downsides noted is that more people per square feet means more stress on facilities Squeezing more people into existing or even smaller spaces is putting structural stress on an office buildings systems, such as parking, elevators, restrooms and utilities that were not designed for the new demands of density that occupiers are seeking.
Whether all this downsizing is simply a passing fad remains to be seen. Only time and the state of the economy will tell! But if Jason Lewis, president and managing broker of EcoSpace in Denver, is to be believed, “Downsizing is here to stay as the new generation of workers will keep requiring a more collaborative, flexible and social work environment. With increased density of populations and increased ability to work mobile, the need for huge corner offices and closed wall work environments will be all but extinct in the near future,”