“Real estate is crashing” “Cities are dying” – these headlines have been splattered across the media for the last few years. But they just aren’t true.
Yes, landlords are currently facing a once-in-a-generation confluence of threats – increased demand for flexible work, increased interest rates, reduced budgets, and a reduced demand for traditional office space. In fact, the National Association of Realtors’s July report stated that the US office vacancy rate hit a record high of 13.1% this past spring. But statistics like this shouldn’t just be taken at face value. When you dig a little deeper it is clear that what they actually represent is the exciting evolution of cities and corporate real estate – not their death.
WFH vs. RTO
It’s indisputable – there has been a fundamental shift in how, where, and when work happens – and that’s not likely to change. However, while we know employees want flexibility, data shows us that they also see the value of in-person work and collaboration. In fact, 73% of remote workers are back to the office at least once a week, and 84% of workers believe that remote or hybrid jobs make them happier, according to a recent study from Hubspot. Data like this is so important to understand. It tells us that the traditional workplace model requiring employees to come into a physical office five days is a thing of the past, but that the office itself is not.
Make sure you are building RTO policies that respond to the needs and wants of your employees. Download the 2023 State of Workplace Experience report to explore insights and data from over 300,000 employees and CRE leaders.
The Experience Economy
The competition for tenants has never been more intense, but the landlords who are succeeding through this market transformation are those recognizing that their real estate needs to focus on and serve the end-user’s experience like never before.
Fostering people-centric places and spaces is critical for the future of real estate. According to Gartner’s 2023 Market Guide for Workplace Experience, investing in employee experience is the #1 priority of two-thirds of corporate real estate leaders. Further supporting this, last year roughly 10,000 employers hired workplace experience professionals and in 2023, 96% of property teams looked to maintain or expand their spending on workplace experience software.
The promise of experience is what will draw people out of their home offices, into a commute, and back into the workplace. By connecting people to real estate, landlords will boost tenant retention and satisfaction, and employers will foster a people-centric culture that promotes productivity and engagement.
Don’t Get Left Behind
So – don’t let the headlines fool you. Cities aren’t going anywhere, and the RTO movement will absolutely continue. The real estate business is just simply transforming. Transform with it, or get left behind.
Want to learn more about how you can transform your operations and enhance your real estate experience? Schedule a demo with one of our experience experts.