The Future of the Office Survey - CBRE Research SEPTEMBER 2020
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CBRE Research The Future of the Office Survey Survey Highlights SEPTEMBER 2020
BREAKDOWN OF RESPONDENTS
77
RESPONDENTS
75%
GLOBAL
23%
TECH, MEDIA & TELECOM
Survey closed September 21
21%
Regions with major presence: BANKING & FINANCE
50% 100% United States
are Fortune 500 Firms 89% Continental Europe 12%
80% India INDUSTRIAL & MANUFACTURING
50%+ 64% Eastern Asia
trending companies 64% UK 8%
BUSINESS & PROFESSIONAL SERVICES
CBRE 2 THE FUTURE OF THE OFFICE SURVEY
CURRENT STATE
THE BUSINESS OUTLOOK IS RELATIVELY POSITIVE
What do you expect the state of the business environment to be in the next six months?
48% 48%
43%
Most respondents
believe the business
environment will be 28%
about the same, if not 24%
better, in the next six
months. 9%
Better About the Same Worse
Jun-20 Sep-20
CBRE 4 THE FUTURE OF THE OFFICE SURVEY
OFFICE RE-ENTRY PLANS PROMISING
Currently, when will all employees have access to the physical office?
TODAY BY MID 2021 BEYOND / UNSURE
Global 21% 46% 34%
On average globally,
67% of respondents United States 18% 46% 35%
expect all employees
to have access to the
United Kingdom 13% 56% 31%
physical office by
mid-2021 – led by
Eastern Asia. Continental Europe 25% 42% 33%
Eastern Asia 25% 56% 19%
CBRE 5 THE FUTURE OF THE OFFICE SURVEY
THE PATH OF THE VIRUS IS THE BIGGEST UNKNOWN
What is preventing your organization from offering more employees access to the physical office?
Current state of community transmission 86%
Corporate concern about employee health risk 83%
Sustained
COVID-related Employee reluctance to return 70%
issues continue
to hamper Consideration for employees to plan around child-care, relocation etc. 58%
employee access
to the office. Risk associated with public transportation 49%
Evaluating prolonged remote working strategy 40%
Maximum capacity restrictions 36%
CBRE 6 THE FUTURE OF THE OFFICE SURVEY
SECOND WAVE INFECTION AND LOCAL SURGES
Daily new cases in 7-day moving averages
14,000 100,000
India (rhs)
90,000
12,000 France
80,000
Spain
10,000
Number of Cases
70,000
60,000
8,000
50,000
6,000 U.S. excl. NY (rhs)
40,000
Brazil (rhs) U.K.
4,000 30,000
20,000
2,000
10,000
Japan China
0 0
0 25 50 75 100 125 150 175 200 225 250
Days Since Daily Increase Exceeds 100
Source: CBRE Research, European Centre for Disease Prevention, COVID Tracking Project, Macrobond, 28 Sep 2020.
Note: Number reported as a 7-day moving average.
CBRE 7 THE FUTURE OF THE OFFICE SURVEY
HEALTH AND SAFETY MEASURES REMAIN TOP PRIORITY
What measures are being taken to ensure health & safety of employees when they return to the physical office?
Offering hand sanitizer / antibacterial wipes near every surface 98.7%
Requiring use of masks / face coverings 94.8%
Generally, the Restricting guest access 93.5%
steps being Health-screening protocols 93.5%
taken to ensure Resetting space for reduced max capacity (signage, visual reminders) 92.2%
employee Offering personal protective equipment 87.0%
health & safety Modifying food and beverage programs 81.8%
upon return
Shift-based re-entry (e.g., A&B team approach or staggered shifts) 59.7%
remain
Conducting comprehensive review of building systems 59.7%
unchanged
Reconfiguring furniture layouts and seating arrangements 55.8%
from June 2020
Reservation-based re-entry 54.5%
survey.
Installing touchless technology 42.9%
Employee COVID-19 testing program (e.g., diagnostic, antibody) 22.1%
Increase of 5%+
Offering alternatives to public transit 19.5% since June
CBRE 8 THE FUTURE OF THE OFFICE SURVEY
WORKFORCE & WORKPLACE STRATEGY
A BALANCE OF OFFICE AND REMOTE WAYS OF WORKING PREFERRED BY MOST
67% of employees desire a balance of office 73% of companies anticipate supporting
and remote as their preferred workstyle. balanced workstyles in the future.
WORKFORCE SENTIMENT SURVEY, 2020 CBRE OCCUPIER SENTIMENT SURVEY, 2020
CBRE survey of 10,000 client employees
When the COVID crisis is over,
where would you prefer to work?
Note: 61% of companies had this sentiment in Jun-20
CBRE 10 THE FUTURE OF THE OFFICE SURVEYTHE PHYSICAL OFFICE IS STILL A REQUIREMENT FOR MOST
Compared with pre-COVID, what is the future of full-time remote work in your company?
Primarily Primarily
“Distributed”
“Office-Based” “Remote”
Workforce
Workforce Workforce
81% of organizations
anticipate most of FT Office vs. FT Remote
their workforce to
utilize the office as
their destination ofASSESSING THE CONSEQUENCES OF REMOTE WORK Remote work policies must comply with local employment law and take unintended consequences into account. Issues to consider relative to remote work policies: • An employer’s ability to require home working • An employee’s right to insist on home working • Required processes to implement home working • Arrangements for home working (health and safety obligations, expense reimbursement, tax allowances, etc.) • Key issues to address in employment contracts and policies • Considerations for employers when communicating and monitoring the performance of employees Source: Global Guide to Remote Working, DLA Piper CBRE 12 THE FUTURE OF THE OFFICE SURVEY
SUPPORTING THE NEW NORMAL WILL ACCELERATE WORKPLACE TRANSFORMATION
Pre-COVID, how were the majority of What is the future of seating assignments in
your workplaces designed? your real estate portfolio?
Majority traditional with dedicated seats Mostly Assigned Environment
57% 10%
(offices / cubicles / conference rooms)
Partial Free Address (75% unassigned)
35%
CBRE 13 THE FUTURE OF THE OFFICE SURVEYUNDERSTANDING THE ROLE OF THE OFFICE
In a future steady-state environment will the importance of your physical office change?
WHY? WHY?
Community & Reduced
Dependence on the Social Interaction
49%
dependence on
office as a place for (100%) the office (98%)
individual work is Collaboration, 41% Investment
Innovation, required to support
evolving… Productivity (100%) remote work (76%)
Reflection of Brand More distributed
…but dependence on & Culture (100%) workforce (63%)
22%
the office for groups Engage & Attract 18%
to come together in Talent (87.5%) 16%
13%
pursuit of a common 10% 10%
6%
goal has never been 5%
more important.
Increase Increase Slightly No Change Decrease Slightly Decrease
Significantly Significantly
Jun-20 Sep-20
CBRE 14 THE FUTURE OF THE OFFICE SURVEYMEASURING THE VALUE OF THE OFFICE Do you have a metric that you track to measure the impact of your workplace? Measuring the impact of the workplace not only No, we do not measure workplace impact 48.1% from a cost and efficiency perspective ⎼ but also Yes, we measure workplace impact on employee engagement 36.4% from an employee and productivity perspective ⎼ Yes, we measure workplace impact on cost management 32.5% will be important to strategically position the Yes, we measure workplace impact on productivity 19.5% C-Suite discussion in the future. CBRE 15 THE FUTURE OF THE OFFICE SURVEY
WORKPLACE FLEXIBILITY
Assigned Seating Unassigned Seating
Dedicated Seats Targeted Mobility Hotdesking Activity-Based Work Work from Home
Work primarily Hybrid dedicated and Majority of seats are Shared Departmental Individuals work
from the office with shared seats driven by unassigned and ‘neighborhoods’ with primarily from the home
minimal out of office work style and functional reserved in advance more variety in work and occasionally come
mobility needs or upon arrival setting choices to the office
CBRE 16 THE FUTURE OF THE OFFICE SURVEYTHE EVOLVING WORKPLACE Activity-Based Work Team-Based Work Event-Based Work 50% ME 36% ME 25% ME 25% WE 36% WE 50% WE 10% SUPPORT 10% SUPPORT 10% SUPPORT 10% AMENITY 18% AMENITY 15% AMENITY CBRE 17 THE FUTURE OF THE OFFICE SURVEY
FOUR LIKELY BETS More Enclosed and Modular Offices Hotelification of the Office Experience Increased Investment in Collaborative Technology Sustained Reliance on Remote Work CBRE 18 THE FUTURE OF THE OFFICE SURVEY
PORTFOLIO STRATEGY
PORTFOLIO OPTIMIZATION GROWING AS AN AREA OF FOCUS
Due to COVID, how are the following portfolio strategy decisions impacted?
Pursuing aggressively Business as usual Paused Canceled
Contraction / consolidation / exit plans 60% +21% 33% +13% 7%
Organizations are
more resolved to Renegotiations 32% +2% 58% +6% 10%
pursue actions that will
help them optimize Renewals 4% 56% 37% 3%
their portfolios while
remaining agile to Relocation Plans 9% 36% 52% 3%
adjust course in the
future as employees
Non-COVID-related Capex 3% 48% 45% 4%
gradually return to
more normal ways of
working. Expansion Plans 3% 13% 74% +10% 10%
Site Visits 1% 15% 63% 21%
CBRE 20 THE FUTURE OF THE OFFICE SURVEYSCENARIO PLANNING FOR THE FUTURE
What future portfolio strategies are under consideration?
Analyze remote work portfolio scenarios 63%
68%
Consolidation strategies 45%
61%
Planning for uncertainty
33%
and flexibility is at the More use of flexible office space 56%
forefront of future
Review geographical mix 30%
portfolio planning 41%
activities. 25%
Hub & Spoke Model 34%
Financial "Amnesty" programs 10%
Dispersion from high-density urban cores 8%
3%
Jun-20 Sep-20
CBRE 21 THE FUTURE OF THE OFFICE SURVEYCOVID HAS ACCELERATED DOMINANT PRE-COVID TRENDS
How do you expect your corporation’s real estate portfolio to change over the next 3-5 years?
Modest decrease 44%
Real estate efficiency
Significant decrease 43%
has been a focus among
occupiers over the last
No Change 9%
decade and clearly
remains one in the
Modest increase 4%
future.
Significant increase 0%
CBRE 22 THE FUTURE OF THE OFFICE SURVEYFLEX OFFERS UNPRECEDENTED ALTERNATIVES TO UNCERTAINTY
What role do you believe flexible office space (coworking, serviced office, suites etc.) will play in
your long-term real estate strategy?
Evolving Occupier Uses for Flex…
50% 49%
1. Network of locations for
mobile workforce
Flexible office space is 37% 2. Enter new markets
proving to be resilient 3. Short-term space solution
as occupiers consider it 23%
4. Reduce capital expenditures
5. Test alternate occupancy
to create new strategies models
that require a more 13% 13%
8%
iterative approach. 6%
…and Demands of Flex
1. Health & safety
Significant Role Minimal Role No Role Unsure 2. Privacy & security
Jun-20 Sep-20 3. Cost
4. Reputation of provider
5. Scale of network
CBRE 23 THE FUTURE OF THE OFFICE SURVEYCORPORATE OCCUPIER DESIRES ARE CHANGING
What will be the most in-demand building attributes in the future?
Flexible office space options 82.0%
Shared meeting space 74.0%
Indoor air quality 68.0%
Occupier desires when Connected technologies / Building apps 62.0%
selecting buildings may
pose operational Sustainable building design 52.0%
challenges for landlords Touchless technologies 51.0%
to deliver in the short-
Onsite café food and beverage 48.0%
term.
Public transportation access 33.0%
Outdoor amenities 27.0%
Fitness facilities 22.0%
Concierge services 18.0%
CBRE 24 THE FUTURE OF THE OFFICE SURVEYPORTFOLIO OPTIMIZATION ISSUES
Lease Accounting Risk Geographical Mix Planning vs.
Changes Exposure of the Portfolio Implementation
• Right of use • Targeting smaller, • Work from anywhere • Continued
impairments suburban locations considerations in uncertainty about
play the future
• Alignment with C- • Less costly and
Suite, Business disruptive to • Considering skilled • Exit leases, excess
Units and Finance temporarily close talent in less costly, space on the
several small smaller markets sublease market
locations and/or try to buy
out of leases
CBRE 25 THE FUTURE OF THE OFFICE SURVEYKEY FINDINGS Occupiers aspire to provide office access. 67% globally anticipate all employees to have access to the office by mid- 2021 – this sentiment is very dependent on virus transmission and health considerations as the re-entry date nears. Occupiers and employees expect an office option. 81% of respondents expect at least half of their workforce to be “office-based” in the future – 73% support these “office-based” employees in balancing their time between the office, home and “third places.” Transformation towards collaborative design will accelerate. As the role of the office evolves to favor teamwork over individual work, design will likely follow suit – 70% are planning to operate in a significantly “free address” environment to support a more mobile workforce. Focus on optimization has intensified. 60% are aggressively pursuing consolidation strategies and 70% have expansion plans on hold as optimizing existing portfolios is a focus in light of uncertainty. Urban core remains important while hub and spoke strategies vary by market and sector. Flexible solutions are attracting greater interest. 56% are considering more use of flexible office space as it offers unprecedented alternatives to plan for uncertainty – 82% indicate it is a desired attribute as they select buildings to lease in the future. CBRE 26 THE FUTURE OF THE OFFICE SURVEY
C O N TA C T S
KAREN ELLZEY JULIE WHELAN
Executive Managing Director, Client Strategy, Vice President, Head of Global
Transformation & Analytics, Global / Americas Occupier Thought Leadership, CBRE
COVID-19 Crisis Management Lead for GWS, CBRE
508.789.7085
617.869.6154 julie.whelan@cbre.com
karen.ellzey@cbre.com
LENNY BEAUDOIN MIKE NELSON
Executive Managing Senior Managing Director, Advisory &
Director, Workplace, Transaction Services, Portfolio
Occupancy, Design, CBRE Optimization, CBRE
212.984.8139 213.613.3214
lenny.beaudoin@cbre.com mike.nelson@cbre.comYou can also read
