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How Will The Future of Work Impact Commercial Real Estate?

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Commercial real estate (CRE) services company Jones Lang LaSalle (JLL) surveyed over 1,000 individuals working in CRE about the industry’s future in a post-COVID-19 working world. New methods — such as working from home and hybrid options — have become prevalent in CRE and other sectors.

Following the survey, here are five takeaways from JLL which explore how the future of work will impact commercial real estate.

  1. Hybrid work is here to stay

The pandemic shifted many workplaces to peoples’ homes and other remote areas. Around 60% of people who say they can do their job from home are working from their house most or all of the time.

The proportion of people working from home has decreased since the height of the pandemic, but the popularity of and enthusiasm for remote work is here to stay. The  pandemic has made people want to work from home instead of doing it out of necessity. In January 2022, 61% of workers who can work from home are doing so by choice. In the fall of 2020, only 36% of workers made this choice, according to Pew Research Center.

Companies that require work in the office are hearing calls to rejuvenate the workplace and make it more suitable for attracting top talent. About 77% of respondents in the JLL survey said they agree that offering remote and hybrid work will be critical in attracting talent and retaining workers.

  1. Prioritizing quality spaces

Because hybrid work is becoming so widespread, industry leaders recognize they must prioritize quality offices to incentivize workers to spend time in the office. The in-person workplace isn’t going away, considering 72% of survey respondents said the office will stay central to their company’s ecosystem.

As companies look to the future, collaboration appears to be a priority in the new world of working — over half of large corporations say it’s one of their top three concerns moving forward.

Industry leaders believe that offices are effective places for employee productivity. They want their employees to have time on-site and have peer-to-peer interaction, learning experiences, and increased well-being in the workplace.

One way companies are focused on improving their workplace offerings is through adding value to their available portfolio facilities. Making high-value additions like adding outdoor spaces for employee breaks is one example of finding ways to invest in workplace wellness.

A grouping of commercial real estate offices.

  1. Organizations are going greener

The world is seeing the adverse effects of climate change, leading to adjustments in the workplace. Employers across all sectors are making their environmental impact a top priority and concern. In the JLL survey, about 77% of decision-makers say their employees increasingly expect their workplace to impact the environment positively.

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Environmental and social aspirations have changed how commercial real estate decision-makers look at the future. Industry leaders say they’re focusing on decarbonization by implementing goals to have net zero emissions by a specific date. Over half (56%) of employers say they have already or will occupy a space with green credentials.

These leaders are using their real estate properties to accomplish these eco-conscious goals and are taking steps to improve carbon efficiency. Generally speaking, upgrading current facilities to make them greener is cheaper and more sustainable than moving to a new building. By eliminating fossil fuel use, leaders can prioritize using renewable energy for on-site processes in the future.

  1. Partnerships are becoming more critical

As the industry evolves, the needs of real estate companies have become more sophisticated. Many CRE organizations realize they must rely on alliances and partnerships because of the increased amount of challenges and risks presented to them in the new world of work.

It is now commonplace for companies to seek input from external data sources and analytics providers, receiving specialized information about their investments. About 44% of industry leaders anticipate more outsourcing as they seek external help on health and well-being services. Another 43% said they will need external support for sourcing renewable energy in the next three years.

  1. Investing in intelligent technology

Finally, CRE companies acknowledge the importance of investing in intelligent technology to sustain and boost performance. Companies that want to elevate themselves and keep up with trends need to take advantage of modern technology and put it to use.

Virtual reality appears to be one of the next big focuses in the industry. About 55% of decision-makers say they plan on bringing virtual reality and immersive technologies to the workplace by 2025. Intelligent technologies are critical for creating new opportunities to heighten productivity and performance in the workplace.

Moreover, data collection will be vital in the industry in the next decade. Advanced analytics will be crucial for companies as they find new ways to understand complex operations models. Right now, only 13% of industry leaders use advanced analytics, but this number will likely grow in the future.

The future is now

Commercial real estate has undergone many changes in the past few years because of COVID-19. The industry has had to adjust to a new world where employees want to work from home and in hybrid situations. As shown by JLL’s latest survey, decision-makers see these five factors as the primary ways the future of work will impact real estate in 2023 and beyond.

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About Author

Devin Partida is a business writer who has written for Worth, Boss Magazine, and StartupNation. She is also the Editor-in-Chief of ReHack.com.

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