September 2022: Return to Office & the Impact of Inflation on CRE

by Chris Brablc in September 30th, 2022

This month's newsletter will include new stats on Return to Office, Inflation's impact on CRE, incentives that work for getting workers back into the office, the impact of floor cleaning on health and a look at advantages and disadvantages of Hybrid work.

We hope this content is helpful as you navigate your return to the office plans and flexible work.

Post-Labor Day Uptick in Office Space Utilization May Not Satisfy Companies’ Expectations by CBRE

CBRE just released some interesting data on the latest in return to office trends with some interesting findings on how it's going based on survey data from corporate end users from CBRE and CoreNet.

Here are some key takeaways:

  • Although 84% of survey respondents want their employees in the office at least 2.5 days per week, 60% indicated that pre-Labor Day usage levels were more than two days below the pre-pandemic average of 4.4 per week in 2018
  • Only 25% of respondents believe that their employees would voluntarily come into the office more often than they do today. By contrast, 58% say that executive leadership would like employees in the office more
  • 31% of respondents said they anticipate adding to their office portfolio over the next three years, 19% foresee it remaining the same and 46% see it getting smaller. That’s a change in some cases from the past 20 months: Only 20% of respondents said their office portfolios had expanded since January 2021, while 31% were unchanged and 44% had shrunk.


The Impact of Floors on Indoor Air Quality and Health - Jeff Cross (CleanFax)

Air quality has become a huge area of focus for health & safety in our workplaces and facilities and this article shares how our every day cleaning of floors has a significant impact on contaminant levels, which I for one have never considered. 

A few interesting tidbits include:

  • 22% of the floor sites were positive for methicillin-resistant Staphylococcus aureus (MRSA) that can cause skin infections, blood stream infections, and pneumonia and is resistant to many common antibiotics.
  • Cracks and crevices are the enemy when it comes to keeping floors clean and luxury plank flooring, wood, floor tile, and even sheet vinyl are full of them. And then there is the carpet, the largest filter in the building collecting whatever falls on the floor and trapping it in the fibers and padding. It is seldom noticed, but if you have ever pulled up carpet to replace it, you know the incredible amount of dirt and grime that can collect underneath our feet.


Inflation Affecting Corporate Real Estate Decisions - CoreNet Global

CoreNet Global shared some survey data on the impact inflation is having on CRE real estate portfolios and footprints. We are seeing trends of shorter lease terms and more caution with longer commitments which makes sense in a time of potential instability in the markets.

Here are a few key stats:

  • More than half, 54 percent, are consolidating locations and 42 percent are reducing the size of leases they are signing
  • 34 percent say that annual escalations are 100 basis points higher than normal
  • 44 percent say that compared to prior to the pandemic their overall corporate real estate footprint has decreased; 21 percent say that it has increased, and 34 percent say that it has stayed the same. Between now and 2025, 39 percent expect an increase in the size of their corporate real estate portfolio, 42 percent expect a decrease, and 19 percent say that it will stay the same.


The Advantages and Challenges of Hybrid Work - Gallup

Here is another good survey for remote-capable employees on the benefits of remote vs. in-office work. The findings fit with many of the expectations we have on the benefits of the two work models and are a good validation on the impact the office can have on company culture and collaboration.

Some key data points include: 

  • The top response for benefits of in-office work collaborative work with colleagues (60%) and the top reason for remote work was working independently (86%)
  • Less access to equipment (35%) and feeling less connected to organization culture (32%) were the two biggest challenges with hybrid / remote work


The Incentives to Get Workers Back to the Office Aren’t Working. Here’s What Would - Alison Green (Slate)

As we put into motion return to office plans, there is a noticeable divide between management and employees. This article shares some anecdotal takeaways from employees on what really would drive them to utilize the office towards the bottom of the article.

A few talk tracks of note include:

  • “What would get me back is real flexibility. I’m happy to work a hybrid schedule, but I have no interest in working a job where the number of days I come to the office per week or per month are kept track of. If I have a month where it makes sense for me to spend most of my time in the office, that’s fine. If I have a month where it’s just not necessary and I don’t feel like putting on real pants, I would hope that my employer could be as flexible with me as I’m willing to be with them. If I am doing my job to the expected standard, I hope that my employer can work with me in truly being flexible and not just worry about Butts in Seats.”
  • “I’m medically vulnerable so if my company wanted to get me back in the office they’d have to implement policies and safety measures that would keep me safe. We’ve never had a vaccine mandate, they got rid of the masking policy as soon as legally possibly (and it was never actually enforced anyway), and have done nothing to implement improve air purification systems or other safety measures even though I work in the medical field and they know better. Showing how little they care about people like me gives me zero incentive to care about them.”


Scoot to the Solution - Jeff Wachs & Billy Yost (American Builders Quarterly)

Facilities leader Jeff Wachs shares how Northwestern Mutual is using technology to drive sustainability and engagement in their workplace experience to drive employee culture, satisfaction and productivity in their shared spaces.


Return to Office hybrid work corporate real estate indoor air quality space utilization


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