Bosses want you back to work in the office despite COVID

Most bosses remain steadfast in their desire to see their white-collar employees in the office even though many workers prefer to stay home most of the time.

About 85% of companies say they want employees to spend half or more of their time there, according to a recent national survey of real estate agents.

But the rise and fall of COVID-19 continues to inject caution into employers’ attitudes about direct job performance. I will need to do their job when they are together.

Office leasing patterns in Los Angeles County for the second quarter show how uncertainties about working from home will change office usage in the coming years.

Real estate industry watchers say office buildings in the LA area are still less than half the population they were before the pandemic.

However, some businesses are making major commitments to their offices and signing long-term leases for large blocks of space, according to second-quarter rental data from the real estate brokerage. CBRE. For example Amazon. said in May that it would lease 200,000 square feet at the Water Garden office complex in Santa Monica to add jobs for the company and technology.

An aerial view of the Water Garden office complex in Santa Monica.

Amazon plans to create more than 1,000 new corporate and tech jobs in Santa Monica in the coming years and has contracted to lease a 200,000-square-foot space in the Water Garden.

(CBR)

Many other employers continue to pay their unused office rent while considering whether they will need more or less space when their lease expires. Several companies — including Netflix, Yahoo and Verizon — pay the rent but have put non-essential offices on the market for sublease, boosting overall vacancy rates by 25% in LA County, data from CBRE said.

Netflix recently laid off 300 workers after reporting its first drop in subscribers in more than a decade but remains the world’s biggest streamer and biggest office tenant in Hollywood.

Although people have adapted to it for more than two years, working from home is far from a steady job for employers. Most of them plan to permanently adopt some hybrid model of working from home and in the office on other days, but its form is still evolving.

“It’s very early in the game,” said CBRE real estate agent Jeff Pion. “I think we are in the second half of this match. Companies are still trying to figure out what’s best for them.”

So even though 85% of companies responding to CBRE’s survey said they want their employees to be in the office at least half the time, there is little consensus on how to achieve this goal. Bosses are roughly evenly split on whether the number of days required in the office should be decided by the company alone or in consultation with employees.

Economists at the brokerage predict that American workers will spend an average of 3.4 days per week at the office, down from 4.4 days a week before the pandemic.

Employees may want fewer days at the office, even if it involves a pay cut or a new job.

A recent survey by human resource consulting firm OperationsInc found that just over half of American workers want to work remotely more often than they do now.

Nearly half said they would even be willing to take a pay cut to increase or maintain their remote work arrangement. Others have an active plan – 40% said they will look for a new job in the next six months so they can work remotely more often or on a daily basis.

The June survey showed tension around employees’ wants and expectations, however, 56% acknowledged that they will likely have to come to the office more often over the next six months, perhaps daily. Three-quarters of workers said their direct supervisor expressed a desire to meet them face-to-face more often.

But many bosses hope that being around other people will be appealing, in the same way that it often happens in recreational settings.

“I can make coffee in my house. I can watch a movie in my house. I can watch baseball, football and basketball,” said Pion, but people still try to do those things with other people. “We are social animals.”

Improvements in technology have gradually liberated workers from the need to sit at their desks for years, but remote work forced by the pandemic has accelerated the rate of departure from designated seats. determined. Technology may hold the keys to making the office more attractive.

Most employers expect increased use of alternatives such as activity-based seating, where workers with laptops and cell phones can use their own room or cubicle to work. concentration. Or employees can gather in a “team room” for team projects or set up laptops in the lounge or coffee shop. Some work locations can be booked electronically.

Such configurations may require ample space, which will not reduce the size and rent of offices for companies – a goal for many.

“Hotdesking,” letting employees grab an open desk when they show up, can reduce space demand, and most employers are eager to use it more once they settle in after the pandemic.

CBRE said that 52% of survey respondents intend to reduce their office space in the next three years, mainly to eliminate the space they expect to free up by working remotely and using efficiency. more fruitful. This is up from 44% in last year’s survey.

Others are growing, with 39% of companies saying they plan to expand their office portfolio over the next three years, mainly due to hiring and business growth. This is up from 29% who said last year they expect to expand.

Examples of changes in Los Angeles County last quarter include First Bank of the Republic, which expanded to take up five floors in Century City when it renewed its lease at 1888 Century Park East.

Century City and the rest of the Westside “continue to be a very popular place for people,” said Pion, led by entertainment and technology companies.

In downtown Los Angeles, which has had an oversupply of office space for decades, property management company TCW Group has agreed to a new lease that will reduce space by more than 20% as it moves headquarters. to another building in January 2025.

“Although the space we are using is smaller than it is today, the greatly improved use of space and design will provide a collaborative work environment and the ability to continue to grow. our business and number of employees,” CEO Liz Kraninger said in a memo to employees, according to real estate data provider CoStar.

City-center offices around the country have been hit hard by the pandemic, as people avoid tall buildings and the public transport they take to work.

According to the most recent pedestrian traffic report by tracking service Springboard, the return rate of workers increased in June. Cameras in major cities attract more pedestrians around. , which Springboard says appears to be a consequence of more people returning to the office.

Weekday pedestrian traffic in US downtowns strengthened in June, to 26% below pre-pandemic levels in 2019, compared with 42% in January, Springboard said. news.

“The gap between now and 2019 has pretty much narrowed,” said Diane Wehrle, director of marketing and insights at Springboard.

Springboard said the daytime rebound was most pronounced during breakfast and lunch hours, indicating that the shift back to the office has accelerated.

The London-based company doesn’t disclose individual cities, Wehrle said, but traffic in Los Angeles follows US standards.

Downtown office owner Christopher Rising of Rising Realty Partners says his buildings on Bunker Hill are home to more than 50% of the population Tuesday through Thursday, the most popular days for office workers.

The city center “has been going through a rough couple of years,” Rising said, but it will benefit from a large influx of residents coming to multi-billion dollar residential projects completed over the years. recently, including the $1 billion Grand LA complex and the planned $1.6 billion Angels Landing Project.

According to Kastle Systems, which provides a key entry system used by many companies and tracks employee swipe patterns, the average U.S. office population has reached as low as 14.6. % in mid-April 2020. Last week it was at 44.1%, around the end of June. Los Angeles is below average with 41.8%.

The vacancy rate in Los Angeles County Grade A office buildings (excluding subleasable space) was 17.5% in the second quarter, slightly lower than the year-ago period and in the first quarter. The landlord’s median monthly asking price of $3.88 per square foot was also little changed from previous periods.

Real estate brokerage Savills said tenants have the upper hand in rent negotiations, even though the Los Angeles-area economy has fully reopened since the pandemic broke out. and the historically tight labor market.

“While these strong fundamentals often lead to higher rental activity and reduced availability,” says Savills, “the continued widespread adoption of hybrid workplace strategies and disparities A steady return to the overall economy will keep the Los Angeles office market favorable for near-term tenants. “

https://www.latimes.com/business/story/2022-07-20/bosses-want-back-to-work-in-office-not-work-from-home-despite-covid Bosses want you back to work in the office despite COVID

Edmund DeMarche

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