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How Hybrid Work is Reshaping Commercial Real Estate

The corporate landscape has undergone a significant transformation in recent years, driven by the rapid adoption of remote work practices. As companies strive to adapt to changing work dynamics and employee preferences, many are contemplating the reduction of their physical office spaces. With the continued rise of remote/hybrid work and its potential implications, how will the corporate real estate footprint reduction strategy impact companies as the workplace evolves?

The Remote Work Revolution

The COVID-19 pandemic acted as an accelerator for the remote work trend, pushing companies to rapidly adopt flexible work arrangements. This shift allowed businesses to maintain operations while prioritizing employee safety and well-being. As remote work proved to be viable and even beneficial in various cases, organizations began reevaluating their traditional office requirements. The reduced necessity for large office spaces led to a reconsideration of real estate strategies that hone in on purposeful spaces that inspire return to office or locating to places where large sums of employees live.

Businesses are rethinking their office space requirements, leading to a shift in evaluation of investment into reimagined workspaces where return to work expectations are met. Larger, more traditional office spaces are no longer “in-fashion”. Instead, companies are seeking down-size and versatile spaces that cater to their immediate, ever-changing needs.

Benefits of Office Downsizing

Reducing office sizes as part of a corporate real estate footprint strategy offers several potential benefits to companies:

  1. Cost Savings: One of the most immediate advantages is cost reduction1. Smaller office spaces translate to lower rent, utility bills, and maintenance expenses. These savings can be allocated to other areas of the business, such as technology upgrades or employee development programs.

  1. Environmental Impact: Smaller office spaces contribute to a lower carbon footprint. Reduced energy consumption and resource usage align with corporate sustainability goals, positively impacting a company’s environmental reputation2.

  1. Agility and Flexibility: Downsizing enables greater flexibility in adapting to changing circumstances3. Companies can pivot more easily in response to market shifts or unforeseen events without being tied down by extensive lease agreements.

  1. Talent Attraction and Retention: By embracing remote work and offering a more flexible work environment, companies can attract a diverse pool of talent from different geographical locations4. This approach also contributes to higher employee satisfaction and retention rates.

Increasing Value for Employees

While office downsizing offers numerous company advantages, leadership may see value and increase employee outcomes.

  1. Collaboration and Creativity: Smaller officer spaces can encourage more meaningful interactions among employees. With fewer physical barriers, collaboration and idea-sharing can become more organic, fostering innovation and creativity4.

  1. Culture: Remote work may hinder spontaneous interactions that drive innovation and a strong corporate culture5. Striking a balance between remote work and in-person collaboration is essential. 

  1. Employee Well-being: Thoughtfully planned space design plays a pivotal role in promoting the holistic needs of employees, focusing on creating an ecosystem that fosters productivity, well-being, and collaboration in order to support mental clarity and focus while sparking creativity6. Purpose-driven office design empowers employees by recognizing their diverse needs and enabling them to thrive both professionally and personally.

  1. Technology Investment: A successful workplace environment requires robust technology infrastructure to not only support seamless communication and collaboration but also house a place of inspiring creativity and productivity7. Companies must invest in tools and systems that enable efficient work performance within their spaces. Spatial offers immersive audio soundscapes that can help boost concentration and cognitive capacity while improving employee well-being and mood within the workplace.

"The pandemic was a catalyst for many to change their personal view on the work-life balance. I think it was a wake up call to US employees that work was not the be all and end all. For the first time, an employer could not dismiss a request to work from home as being unproductive or impractical. Work life integration has become the mantra. Physical space has a real value in relation to collaboration, casual collisions, the physical manifestation of culture and particularly for those early in their careers, but it does not need to be 9-5 monday to friday, or even in a traditional space. We will see a continued growth in Third Place spaces (flex offices as well as non traditional spaces) where people can commune without the commute. And the office spaces that do continue to exist will need to be driven by the "why" people want to be there and not just be a "where" that they are mandated to come to.”

- Simon Davis, Founder and CEO, Purposeful Intent

The corporate real estate landscape is evolving as companies respond to the changing dynamics of remote work. Downsizing office spaces is a strategic move that offers companies financial benefits, emphasizes environmental considerations, and improves employee retention and flexibility. Striking the right balance between remote work and in-person collaboration can have a positive impact on the culture and help improve employee well-being. Making the most out of estate space in order to inspire employee productivity and engagement while leveraging financially sound workplace infrastructure is key. As organizations continue to adapt, the optimal corporate real estate footprint will likely be a dynamic and personalized blend of physical and virtual spaces that best suits the needs of both the business and its employees.








Purposeful Intent is an ongoing series of curated executive forums enabling open discussions and thought leadership around the Future of Work and the Future of Living. It is aimed at professionals in Real Estate, Workplace, HR, IT and Hospitality.

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