By Kristen De Deyn Kirk
It’s all about staying flexible. We know the drill: Since COVID, we’re ready for anything. That’s true for businesses pondering their office space.
Colliers International Managing Director Perry Frazer
Perry Frazer, managing director, executive vice president and principal at Colliers International in Norfolk, estimates that 80 to 85% of local businesses have returned to work in a close to normal capacity. Others are hybrid, spending some time in the office and at home.
“I believe that most businesses and business leaders would prefer to have their staff in the office,” he says. “However, due to limited workforce, leaders are having to be more flexible so that they can recruit and retain employees.”
Business with headquarters in larger cities have applied their policies to smaller markets, Frazer notes, resulting in more work-from-home options and related office closings and consolidations. The companies with significantly larger footprints have been able to “give back” office space as they reduced the in-office workforce.
Several local call centers have vacated their spaces, Frazer says. In some cases, the premises have been absorbed by other companies. “In others,” Frazer shares, “the [empty] space will impact the market.”
Also negatively impacted, he notes, are suburban offices located in places where employees cannot easily walk to amenities.
“We are seeing great activity in amenity-rich locations like Summit Pointe (Dollar Tree development in Chesapeake), Downtown Norfolk and Town Center,” Frazer says. “I attribute this to employers locating in areas where they can offer employees a work environment that is in close proximity to restaurants, entertainment, residential and other amenities.”
Overall impact of work-from-home has been minimal, though, according to Dennis Donovan, a principal with WDG Consulting in Bridgewater, New Jersey. He and his firm helped Chubb, ADP and Target locate in Coastal Virginia, and they have conducted market studies for the Hampton Road Alliance.
“The amount of office space required,” he says, “in my opinion, will decline, but not precipitously.”
So far, he has seen a five to 10% decrease in space requested by businesses. More common is their space being re-configured.
“You’re not going to see bullpens anymore,” Donovan predicts. “People aren’t going to be packed on top of one another. We’ll have more space between cubicles. There is going to be more collaborative space where people can get together; Gen Zers who crave interaction drive this.”
Look, too, for offices to eventually be closer to home.
“It is going to be important. We are seeing a greater resistance to commute,” Donovan says. “Even 30 minutes is becoming problematic. It used to be that the vast majority of your employees would reside within 30 minutes. It’s still the case, but if an employee can reduce the commuting from 30 minutes to 15, they’ll do it.”
Fast Facts
- Nationwide companies are more likely to offer flex or hybrid work schedules and potentially reduce office space.
- Since the height of the pandemic, employees are preferring shorter commutes to their office. Fifteen minutes is becoming the limit.
- Employees want their offices to be near restaurants, shops and entertainment.