The previous two years have seen the office landscape shift considerably. The global pandemic forced a change that seemed impossible before, with millions of people across the country suddenly working remotely. The long-term impact of this shift has been difficult to predict. However, many forecasts have hinted at the gradual decline of the modern office as we know it.
To find out how the sector evolved, CommercialCafe surveyed 1,242 website visitors and looked at Google Trends data between March 2018 and May 2022. With an aim to discover what major motivators are driving current searches for office space and how workplace needs have changed over time, their study unearthed some interesting insights. Here are the key findings:
2022 Sees an Upsurge in Searches for Office Space
Despite countless warnings that employees would be reluctant to return to the office once they’ve had a taste of remote work, searches for “office space to rent” have been on the increase since June 2020. There have been some ups and downs along the way, and unsurprisingly March 2020 saw a considerable drop. However, overall, there’s been a steady upsurge of people looking for office space to rent. Indeed, by May 2022, searches had been well above pre-pandemic levels since the middle of 2020.
Similarly, searches for “office space to buy” were also far higher recently than they’ve been over the past four years. After a significant drop in March 2020, search volumes rose and fell throughout 2020 and the first three quarters of 2021. However, since the end of 2021, they have risen drastically. In addition, the past few months have seen searches plateauing higher than at any other time over the previous four years.
Smaller, Single-Tenant Offices More Desirable
When asked what the motivation behind their current search for office space was, survey participants gave a range of answers. Mostly, there was an even split between the five answers. However, 24% of respondents noted that a need to downsize their office space was the primary cause for their search.
In comparison, only 16% of those surveyed considered a larger office space. Instead, a smaller office better suited to hotdesking or managing a hybrid work schedule seemed desirable for many of those searching. This hints at how changes in working practices are directly impacting the physical workplace.
Pandemic Changes Tenant Preferences
With 23% of searchers seeking to be the sole occupier of the building, single-tenancy is another change that has come about due to the pandemic. This ties in with other changes to preferences in terms of amenities.
While more than half of those searching claimed their preferences hadn’t changed much, 12% of respondents expressed their desire for more natural light and access to generous outdoor spaces. In addition, just under 10% were willing to share a building with other tenants but wanted separate entrances to avoid crowding. Meanwhile, 6% of searchers were reluctant to take out a lease in a larger structure (100,000 square feet +).
Almost a Quarter of Respondents Looking for a Better Deal
Of those asked, 23% noted that one of their primary motivations in seeking office space was to get a better deal in terms of the price they were paying per square foot. This perhaps hints at the fact that tenants have become aware of the rise in vacancy rates and the drop in rents.
Additionally, 14% of respondents admitted that their search was aimed at seeking out better quality upgrades.
Location Matters: Central vs. Suburban
As millions of people left major urban areas during the pandemic, it seemed that central business districts (CBD) and downtown offices had perhaps had their day. Paired with uncertainty regarding full office returns, hybrid or fully remote working practices, prudent real estate professionals were preparing for considerable changes in office location preferences.
However, two years later and those shifts have yet to take effect. Indeed, the vast majority (74%) of respondents are looking for office space in the same city. Of those, 45% wish to find space close to the CBD or downtown area, compared to 29% looking for space in the suburbs.
Suburban spaces are in high demand, though, with 46% of respondents looking to move their offices to the suburbs. Of those, 17% preferred suburban office space in a different city to the one they currently operate in. This compares to just 10% of those surveyed looking to relocate to a different city’s CBD or downtown area.
Less Than Half of Respondents Planning for a Full Return to the Office
One of the most significant shifts caused by the pandemic is how people work. Pre-pandemic, most employers would have been searching for office space with the explicit intention of their entire workforce to be present at the office full time. Nowadays, things have changed considerably.
Less than half (43%) of those surveyed are planning for a full return to the office. The remaining 57% envision some version of a hybrid scheme at the workplace. Of those, 20% plan for just a few days per week in the office, while 18% aim for more days in the office, but at least a day or two working from home.
Meanwhile, 13% anticipate most days spent in the office, with just a few days a month working remotely. Surprisingly, 7% of those searching for office space envision a hybrid model of working with just a few days per month in the office.
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