As companies try to navigate the hybrid work model and their office space needs, it's been a case of executives and employees trying to find their way and a new balance. The pandemic seems to be slowing — although on January 23 there was a running daily average of 46,418 cases and 36,650 hospitalized, according to the New York Times, and the CDC still lists Covid-19 and the third leading cause of death in the US.
Many companies are pushing to get workers back into the office. But according to a new survey from American Staffing Association and Harris Poll, only 48% of workers work completely in person in corporate offices, while 28% are hybrid and 24% are fully remote. A majority of them are out of the office at least part of the time if not all.
John Gates, CEO of Americas Markets at JLL, told Yahoo Finance that his company is using client surveys, badge swipe data, and sublease data to understand what is happening with the office market.
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"What we're seeing is for organizations that have allowed some form of hybrid working," said Gates. "Their people tend to be in on the same days. And they are for good reasons. They want to be together. That's part of the point anyway, to collaborate, to have meetings, to kind of get to creative energy. But if they're all in on the same days, then you need close to the same amount of space."
The tech industry has seen a big change in its relationship to office space. Where the sector had been hotly leasing space as they expanded with pandemic-ignited demand, things have slowed. Even up to the middle of 2022, tech companies represented 12% to 15% of sublease space. Now it's surpassed 50%.
"We had not fully recovered in terms of total leasing volume post the start of the pandemic, but it had been creeping back up to about 70%, 75% maybe even in some places," Gates said. "And it's ticking back down to maybe 60% of pre-pandemic levels."
It's still unclear how much office space companies will end up with. Gates said that companies using a hybrid model tend to find that employees come in on the same days. "That's part of the point anyway, to collaborate, to have meetings, to kind of get to creative energy," he said. "But if they're all in on the same days, then you need close to the same amount of space."
Although historically that would mean falling rents, companies are moving into newer and nicer space to lure workers back into the office. "So, it's almost contradictory in terms of market environment, but we still do see very high rents in office leasing in most markets," said Gates. "We see peak rents in some cases because the leases are going into brand new buildings."
Some of the top design changes and amenities are a lot less individual space and more communal space for collaboration and meetings. Food in some form and social gathering space are top of the list.
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