MBA Tries to Come to Grips with Office Demand
Don’t expect a return to the old office market says the Mortgage Bankers Association.
Two years in and pandemic conditions, as they wax and wane, have left office properties at 43.8% of pre-pandemic occupancy, says Kastle Systems.
Trying to understand where office use, and therefore the office market, is going has been at a minimum perplexing. Will employers succeed in getting workers to return to the office/? Will employees win the ability to stay out of the office most of each week? On the backs of the answers to these and other questions rests the future of the office market. In the U.S., this could mean shedding 145 million square feet over the next two years.
The Mortgage Bankers Association in a new report says that if the goal is to have everyone back in the office, then unlike the Apollo 13 mission, failure may indeed be an option.
The organization looked at two scenarios. One is the continuation of current hybrid office trends. In the other, a looser labor market (which has yet to show signs of happening) could give employers the necessary leverage to get everyone back into the office.
To understand the issue, as the report smartly noted, one has to remember that to date, employers and employees alike have only experienced the short-term benefits and costs of remote work.
“As we think about companies’ return-to-office practices, we need to consider the impacts of a) workers’ views of their costs and benefits of being in the office versus remote, b) employers’ views of their costs and benefits of employees being in the office versus remote and c) whether labor market conditions at a given point in time weight workers’ or employers’ views more.”
But in the light of the previous point, all this is something that could be up in the air for years, as it will take experience, and developing market conditions, for all involved to know.
About three-quarters of companies expect to have less dedicated office space in the future. Two-thirds plan on more activity-based work and hot-desking.
The most likely outcome will be something in between the pandemic-infused hybrid office trends and one where employers corral their employees back in, suggested the MBA. But the organization also warned, “In either path, it is unlikely that we will see the office market return to its former shape, size, and dimensions.”