Office Fit Outs Poised For Huge Shift Post-COVID

All eyes are on the office sector as the country climbs out of the COVID-10 pandemic, and one thing appears certain: the physical office as we knew it is in for a dramatic makeover. 

A new JLL report about office fit outs notes that one-size-fits-all solutions are a thing of the past as office users test new models, modify existing programs, and prioritize flexibility and choice in their space planning considerations. It identifies three key trends driving the priorities of office occupiers: mobility and the new partially remote workforce, technology-centric design to support new ways of working, and a focus on wellness and sustainability that’s integrated through office design.

More than half of corporate employers expect their people to work from home at least two days a week post-COVID, according to JLL research, and that means fewer companies will provide every employee with a permanent desk. Office design will thus emphasize custom collaboration and community spaces, JLL says in the report, with heads-down workspaces available on an as-needed basis.  From a cost perspective, this means the cost per square foot will generally be higher than a standard office with dedicated workspaces–but some employers may choose slightly smaller footprints since fewer employees will likely be onsite at any given time.

JLL also notes that “a permanent shift  to virtual collaboration will require the reimagination of the technology setups in many existing office designs today.” This translates into more conference rooms, huddle rooms, and flex collaborative spaces that allow for video calls and presentations. The scope and quality of tech improvements office occupiers consider will directly impact cost when it comes to this trend, and JLL advises occupiers considering building or renovating office space this year to steer away from relying on benchmarks from previous years: “The quantity of technology in an average office is forecast to continue rising, which will mean increased complexity to support a more robust technology suite,” the report notes.

Finally, the shift toward sustainability and wellness in office design that began pre-COVID is likely also permanent, and JLL predicts we’ll see more LEED and WELL certifications going forward. The upfront costs of these generally include both higher construction costs and the fees involved with applying for and receiving the certification. But over time, energy efficiency gains realized in the certification process typically pay for themselves–and JLL predicts the return on wellness-related investments will likely play out in improved employee health and retention.

Office fit out benchmarks for progressive space–defined by JLL as efficient open office floor plans with mostly bench style seating, no enclosed offices, and a high ratio of small huddle rooms–ranges from $155 per square feet for the base level to $181 per square foot for medium quality spaces and $224 per square foot for high-quality custom flex spaces specific to the end user. Costs for moderate space consisting of “agile floor plans” composed mainly of workstations in an open setting and a moderate number of private offices and mid-sized collaborative workspaces, range from $159 per square foot for base. $190 per square foot for medium, and $232 per square foot for high-end offices. And traditional space–think private office heavy floor plans with a quarter to a third of spaces dedicated to private offices, as well as large conference rooms–clock in at $168 per square foot for base, $201 for medium, and $243 for high quality.

New York City tops the list of most expensive office fit out markets, followed by San Francisco. On the opposite end, the South and Southeast, led by the Texas cities of Austin, Fort Worth, and San Antonio, are the cheapest for office construction.