Future of Work and Return to Office Commercial Building Needs and Trends
Laura Laltrello, vice president and general manager of Global Projects, Honeywell Building Technologies
As back-to-office efforts continue in many parts of the world, business leaders are grappling with how to manage their existing office space footprint while also planning for future needs. Though many pundits have predicted that that the pandemic-induced move toward remote and hybrid work will cause a precipitous decline in the use of office space, these forecasts are likely greatly exaggerated – or at least shortsighted. Remote and hybrid work schedules may mean fewer employees in a workspace at any given time, they won’t necessarily reduce the overall need for the office space itself.[i] In fact, several workplace trends already portend increased global demand for more flexible, energy efficient, tech-friendly office buildings that can better accommodate tomorrow’s workforce.
Economic Growth Is Strong
Strong economic growth is fueling global business expansion, which, in turn, is driving up demand for office space. Major U.S. metropolitan areas, including Chicago,[ii] Los Angeles,[iii] Atlanta,[iv] New York City[v] and Boston[vi] have seen a rebound in office space leasing since the pandemic began. Among the tenants, Big Tech is leading the expansion as many companies add new office space in key markets, citing the importance of in-person interaction[vii] to their future innovation and success. Outside the United States, strong tech-sector growth in India[viii] and a booming fintech start-up scene in Africa[ix] – particularly Nigeria – are creating demand for new office space where little available Grade A stock currently exists.
Population Changes Fuel Demand
Global demographic changes are also driving up the need for office space. According to United Nations projections, the world’s population is expected to reach 8.5 billion in 2030 and grow to 9.7 billion by 2050.[x] More people means cities of all sizes will grow. By 2050, 68% of the world’s population will live in cities,[xi] up from 54% in 2015. This trend will add as many as 2.5 billion people to urban areas, with 90% of this increase taking place in Asia and Africa. In fact, this growth is already apparent. According to a 2021 survey of global workers by CBRE,[xii] 50% of office building workers in Asia-Pacific (including 66% of Asia-based companies[xiii]), 33% in EMEA and 29% in the United States expect the size of their office portfolios to increase over the long term.
Most Workers Are Back the Office…At Least Some of the Time
While the pandemic initially forced many employees into at-home work, many have since returned to the office. A survey by ADP Global Research Institute found that 76% of employees are working in-person at least some of the time,[xiv] though percentages – and specific working arrangements – vary by region. For example, nearly half of the companies in Asia surveyed by CBRE[xv] prefer dedicated seats for their staff, rather than sharing desks via “hot desking” arrangements because they do not intend to adopt hybrid work arrangements on a permanent basis.
Employees also say they prefer working in person – either full-time or on a hybrid basis — to being fully remote over the long term. For example, the CBRE [xvi] research found that more than one-third of the U.S. workers surveyed preferred working mostly in the office, compared with one-third who wanted hybrid work and just 8% who wanted 100% remote work. These preferences tend to break out along generational lines. For example, Baby Boomers and Generation X are the most “pro-remote” workers,[xvii] but Millennials and Generation Z – who are rapidly backfilling retiring Boomers in the workforce — express a strong preference for hybrid work[xviii] and place high priority on face-to-face time with their colleagues.
New Expectations Require Smarter Spaces
All these developments bode well for the long-term growth of global office space, but also begs the question of whether our current office working environments can meet the needs of the future workforce. There is widespread agreement that offices of the future will need to do more. Even as workers express willingness to return to in-person work, they expect and demand work environments with modern amenities that promote their overall well-being. A recent survey by Honeywell revealed that 72% of office workers worldwide are at least somewhat worried about the indoor air quality (IAQ) in their buildings and 62% say they’re prepared to leave their job if their employer isn’t taking steps to create a healthier indoor environment.[xix]
In efforts to attract and retain top talent and allay worker concerns, forward-thinking businesses are taking steps to create smarter, more inviting spaces that will entice workers - not only to come back to the office but also from a recruiting perspective.[xx] In many cases, they have prioritized the installation of a modern building management system (BMS) that can dynamically monitor and adjust IAQ, lighting, temperature and ventilation to help make the working environment more comfortable and more energy efficient. They’re also mapping out flexible floor plans that decrease worker density while encouraging socialization, face-to-face collaboration and “serendipitous interactions,” and designing meeting spaces that are specifically built for training programs and culture building.
Trends suggest that the world will not only need more office space over the next decade, but that this office space will need to accommodate new working ways of working and promote safer and more sustainable environments. Whether it’s improving indoor air quality levels, better security measures, or more flexible space to foster collaboration and interaction, businesses must invest today in office space that will prepare them to meet tomorrow’s challenges head on.
[i] JLL, The Future of Global Office Demand, June 2020. [Accessed March 25, 2022].
[ii] The Real Deal, Chicago’s Q4 office leasing records 2.7M sf of new deals, highest since the pandemic, Connie Kim, January 26, 2022 [Accessed April 1, 2022].
[iii] Los Angeles Times, Your boss wants you back in the office despite COVID. Here’s why. Roger Vincent, January 12, 2022. [Accessed April 1, 2022].
[iv] The Atlanta Journal-Constitution, Metro Atlanta employers bet on return to office space, Andy Peters, January 11, 2022. [Accessed April 1, 2022]
[v] Crain’s New York, Manhattan office market ends 2021 on a strong note, Eddie Small, January 3, 2022. [Accessed April 1, 2022].
[vi] GlobeSt.com, Boston Tops the List of Expanding Office Markets, Kelsi Maree Borland, October 28, 2021. [Accessed April 1, 2022].
[vii] The New York Times, After Pandemic, Shrinking Need for Office Space Could Crush Landlords, Peter Eavis, Matthew Haag, April 8, 2021. [Accessed March 24, 2022].
[viii] The Economic Times, IT companies set to drive office space demand, Sobia Khan and Kailash Babar, December 9, 2021. [Accessed April 4, 2022]
[ix]Knight Frank, Africa Office Market Dashboard, Q3 2021. [Accessed April 1, 2022]
[x] United Nations, Global Issues: Population. [Accessed April 1, 2022]
[xi] United Nations Department of Economic and Social Affairs, 68% of the world population projected to live in urban areas by 2050, says UN, May 16, 2018. [Accessed April 1, 2022].
[xii] CBRE, Five Global Themes Influencing the Future of Office: 2021 Occupier Sentiment Survey, September 7, 2021. [Accessed March 18, 2022].
[xiii] CBRE, Future of Office Survey: Asia Pacific Results, August 2021. [Accessed April 4, 2022].
[xiv] ADP Research Institute, People at Work 2021: A Global Workforce View, Nela Richardson and Sara Klein, 2021. [Accessed April 1, 2022]
[xv] [xv] CBRE, Five Global Themes Influencing the Future of Office: 2021 Occupier Sentiment Survey, September 7, 2021. [Accessed March 18, 2022].
[xvi] CBRE, Five Global Themes Influencing the Future of Office: 2021 Occupier Sentiment Survey, September 7, 2021. [Accessed March 18, 2022].
[xvii] Hubble, Gen Z and Millennials are Much More Pro-Office than Gen X and Baby Boomers, August 11, 2021. [Accessed March 25, 2022].
[xviii] Ipsos, Young people and working from home (WFH) in the pandemic, March 9, 2021. [Accessed March 18, 2022].
[xix] Honeywell, Honeywell Survey Reveals 72% of Office Workers Worldwide Worry About Air Quality in Their Buildings, February 15,2022. [Accessed March 18, 2022].
[xx] Harvard Business Review, Why Companies Aren’t Cutting Back on Office Space, Jose Marria Barrero, Nicholas Bloom, Steven J. Davis, January 25, 2022. [Accessed March 18, 2022].