More Evidence That Reducing Office Space Is Losing Its Appeal

Add yet another survey to mix that attempts to decipher how office tenants are thinking about space after the pandemic.

In a survey of 3,115 US office space decision-makers and influencers, BOMA International (in conjunction with Brightline Strategies and supported by a grant from Yardi), 55% of tenants said they were reassessing space needs. That was a decline from 61% in BOMA’s Q4 2020 survey.

Forty-eight percent of those respondents likely to reassess needs said they would reduce their square footage. In Q4, 54% said they were reducing space needs. Looking at overall responses, 37% of tenants surveyed said they were reducing space needs. To minimize space, companies were looking at reducing the number of private offices, hoteling desks for flex workers and reducing the size of common areas.

“While this indicates the potential for nearly 4 in 10 tenants to consider some reduction—demanding attention from owners and operators—the numbers are trending toward more stable space utilization,” according to BOMA.

Another recent survey shows similar trends. By comparison, a recent CBRE survey indicated that just 9% of companies plan to significantly shrink their office portfolios, a figure that’s far less than last year’s 39%.

Of the 185 companies surveyed by the CRE giant in its Spring 2021 Occupier Survey, a whopping 85% say they expect employees to spend at least half of their time in a physical office. The majority of large companies—72%—appear to be planning for what CBRE calls “modest” office-space reductions, a significant increase from CBRE’s September 2020 survey results (45%).  And smaller companies report they’re more likely to keep their portfolio the same or grow it.

The BOMA survey also showed other interesting trends. It found that almost two-thirds (62%) of survey participants believe that the pandemic will ultimately transform how they do business and is a “tremendous inflection point” for their workplaces.

Compared to its Q4 study, the number of respondents seeing less value in their office space has gone up to 42%, a 12-point increase since the Q4 2020 study. Still, tenants reassessing office needs fell from 61% in Q4 to 55% in the most recent study. 

Before the pandemic, 80% of employees were in the office full-time. Over the next 12 to 18 months, that number is projected to drop to 58%. Twenty-six percent of respondents say their offices will mostly telework 12 to 18 months from now. Part of that acceptance of telework probably stems from the feeling (from 69% of respondents) that teams have remained productive while working from home throughout the pandemic.

One way to keep wavering tenants is with investments into the buildings. Sixty-four percent of respondents want their building teams to invest in amenities that increase organizational culture, connectivity, productivity and well-being.

But tenants still believe that the office is necessary. Seventy-eight percent said that office space is vital to conducting business, an increase of four points since the previous study.