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Companies are slowly but surely transitioning to some form of hybrid work. According to the 2022 Spring US Occupier Sentiment Survey from CBRE, 73% of companies plan to have some sort of hybrid workplace policy. For commercial real estate professionals, the inevitability of hybrid office usage evokes a single burning question: How will this impact office sector demand?

According to Stefan Weiss, senior economist at Econometric Advisors, who spoke last week in a CBRE-hosted webinar about US office occupier sentiment, the hybrid work environment will reduce office space demand by about 9%. There are a few contributing factors that play into that number. First, under the average hybrid work model, employees will spend about 24% less time in the office than they did before the pandemic, and employees will spend about 1.6 days, on average, working from home each week. However, says Weiss, “There won’t be a one-for-one reduction in space needs for employees because of what we call the efficiency factor. This is the ability of companies to convert less physical time in the office to less physical space. Because of the need to accommodate peak occupancy days, the efficiency factor is at about 55%, meaning that is you have equivalent of 100 less people in the office, you could only remove 55 desks.” In addition, there is a greater demand for collaborative spaces and amenity spaces, which is a net positive of about 5% for office space demand.

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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