Employers who downsized office space say they now need to expand with hybrid work
More employers want to add office space after shedding it during the pandemic and the yearslong transition to hybrid work, according to a new survey from real estate firm CBRE of 225 companies with offices in the U.S., Canada and Latin America. Last year just 20% of companies said they expected to expand their occupied space in the next three years, compared to nearly 40% this year, that survey found.
With a large chunk of the workforce now back working in person (at least a few days a week), some companies that downsized too much, or added staff and expect to add more, are realizing their spaces can’t properly accommodate employees on high attendance days, according to the report.
“There aren’t enough conference rooms, there aren’t enough focus areas, there aren’t enough private areas for people to sit and do the work that they need to do,” said Julie Whelan, the report’s main author.
Last year 53% of companies said they planned to decrease their real estate portfolio, compared to 37% this year. A quarter of respondents said they expect their portfolios to remain the same, the report found.
The transition to hybrid work led companies to not only downsize but also reconfigure their spaces — opting for shared desk arrangements with staff now occupying space on staggered days. Some also built out new spaces to cater to new ways of working, adding more collaborative open spaces with shared booths and other lounge seating options, or more focus areas and private phone booths, for example.
Some companies now feeling cramped or that their space just isn’t working for them are moving to new larger spaces — but that can be costly. Others are largely staying in place and renegotiating leases while market conditions favor tenants, according to the CBRE report. Those employers are now reconfiguring their offices again after a bit of trial and error to make better use of the space they do have.
Janet Pogue McLaurin, global director of workplace research at Gensler, is seeing this with clients. “It may not be a wholesale change, but they need to go in and do some small interventions and repurpose space that’s not being used heavily into something that is really needed by employees,” she said.
The need for more, and better spaces to hold hybrid meetings is one key area of interest, she said. Globally, about 61% of meetings hosted in the office are still hybrid — with both in-person and remote attendees, according to Gensler’s 2024 Global Workplace Survey report. In the U.S., 54% of meetings fall into that category. That’s unlikely to change with more distributed teams, increasing travel, and general conflicts getting everyone in the same place at the same time.
Ineffective and unnecessary meetings remain a key productivity challenge across many organizations, and improving them is a top priority for business leaders today, according to Peter Miscovich, executive managing director and global future of work transformation leader at real estate firm JLL.
“I actually have two CEOs that have meeting reinvention and reimagining meetings as their top enterprise leadership priorities,” he said.
Poor meetings practices also fall in HR’s purview. “When you’re in meetings all day, back to back to back — even hybrid meetings — there’s a certain level of burnout that occurs. And so the question is, what is the right cadence, how do we ensure meetings are purposeful and that they’re well planned, organized, and the technology works well?” Miscovich said.
Revamping conference rooms to better hold hybrid meetings is an ongoing office design trend to better cater to the future of work. In some cases, designers are taking some tips from movie and television show directors, employing filmmaking techniques to ensure proper lighting, video and audio to make meetings higher-quality and better foster meeting equity.
Gensler recently expanded its Washington, D.C. office, taking over the rest of a remaining floor in the building to better occupy a growing number of staff and their new ways of working. It was largely driven by an unassigned desk system, requiring more seating, Pogue McLaurin said. But the firm also realized “we just didn’t have enough hybrid meeting spaces,” she said.
“We had taken over some of those conference rooms for private offices, and realized we need more conference rooms as we start coming back because the hybrid meetings, you just can’t take at your desk,” Pogue McLaurin added.
Gensler’s new space includes other features like a terrace for outside work and events and a quiet zone — areas employees are wanting to occupy more often while working in person.
“Alonement” spaces that promote solitude, or serve as a setting for the modern smoke break, are also seeing increased demand from other design firms.