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OFFICE SPACE IN A POST-COVID WORLD: RETHINKING OFFICE NEEDS AND PRIORITIES

office space with Ryan Panet of CBRE

With the COVID-19 pandemic creating a mass-scale transition to working from home for many industries in York Region and across Canada, it has created a sense of uncertainty and intrigue around what the future of office space holds. As our business community slowly begins to reopen and people return to work, we present insight from Ryan Panet, Vice President at CBRE Canada on the impact COVID-19 will have on office space moving forward.

The following is provided with permission from Ryan Panet’s ‘Musings From Around The Market’ e-newsletter, which goes into further detail on this and other office market trends and topics. The views and opinions expressed are those of the author and do not necessarily reflect or mean an endorsement by York Region Economic Strategy.

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THOUGHTS TOWARD OFFICE RE-ENTRY AND CONCERNS WITH OFFICE LEASING GOING FORWARD

Vaughan Metropolitan Centre

Amenities such as subway access and other transportation are still critical elements when businesses return to the office, but new safety measures will be in place to limit the spread of COVID-19.

I’m looking forward to the day when I’m once again having meaningful discussions with clients about how to adapt to this evolving situation. No doubt, until there is a vaccine available or some other form of confidence that this pandemic is under control, there will be no hard and fast framework to apply towards the way we work and occupy office space.

In the conversations that I’m having with clients during this time, there are many interesting and thought provoking discussion points, such as:

  • How much of my staff can continue to work from home… or even if they could, do they WANT to continue to work from home (“WFH”)?
  • When it’s deemed safe to re-enter our buildings, how can we mitigate any future health risk?
  • Will my employees ever want to ride public transit again? Do we need to focus on locations that have an abundance of parking?
  • Should we split operations into multiple offices so if one office is contaminated, we don’t have to send everyone home? “Hub and Spoke” concept
  • Does the idea of flex office sound more appealing than traditional office towers? In flex office there are no common areas (elevators, lobbies), employees can park outside their office door and access their space directly.
    Two different office space styles

    How will COVID-19 physical distancing requirements disrupt the open concept office trend?

  • Are we going to see a pullback in demand for downtown core office space as companies place higher value on being located in more cost effective suburban locations?

If you’re looking to lease space or renew a lease in the next 12 months, maybe a shorter lease term is best right now.

I’ve also had great conversations within our team about how most recently “pre-COVID” landlords have been engaged in the “amenities war”. The amenities war was based on the idea that employers had to be located in buildings that would offer everything from daycare, food, retail services, fitness, etc. as it would help attract and retain employees.

Going forward, at least in the near term, I don’t think the amenities discussion will be as prominent; I believe tenants will be focused on a landlord’s COVID response protocols.

What are landlords doing to create safe and sanitary working environments? The emphasis for employers is less about the ability to grab a Starbucks and more about the level of clean filtered air or number of times an elevator gets sanitized on a daily basis.

If you’re not thinking about these things yet as you start to engage in office re-entry discussions, you should be. We’re constantly challenging theories and brainstorming what the new (short term and long term) work environment looks like and believe me, there are no right answers yet. But beginning the conversation is healthy and productive.

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ABOUT THE AUTHOR:

Ryan PanetRyan Panet is a Vice President with the Advisory & Transaction Group at CBRE Limited, which specializes in office leasing and leasing strategies. Ryan’s core focus is in the GTA northeast markets with a strong emphasis in York Region. He often works with high growth startups to help them maintain consistent cost structure and flexibility with their real estate.  In his spare time, Ryan is usually involved in some form of sport or activity with his wife and 3 kids.

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The Regional Municipality of York
Economic Strategy Office
17250 Yonge Street
Newmarket, Ontario, Canada
L3Y 6Z1

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Markham, Ontario, Canada
L6G 0E7

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