These insights were part of a national survey BOMA conducted earlier this year in conjunction with Yardi and Brightline Strategies. The survey, the third in a series conducted over the course of the pandemic, polled some 1,267 corporate decision-makers and influencers.
Among the key takeaways are the props that survey-takers gave to property managers and owners as they navigated through the pandemic. Fully 80% of this year’s respondents gave their managers kudos for their handling of COVID-19 issues. If there were any hesitations about renewing with current management or ownership, the top reason (30%) was an interest in the competitive advantage of other spaces.
Despite the accelerated rise of remote-working strategies, the office environment emerges from COVID-19 as vital to business success. “A striking 86% of tenants nationwide said they believe office space is now or will be vital to operating a successful business,” states the survey report, “a rise of 8% since the 2021 survey.”
That view of the vitality of the office is highest among classA tenants (90%) and those with more than 5,000 square feet of space. But tenants in smaller spaces are also seeing greater value in the office post-pandemic, to the tune of 79% of survey-takers.
All of which would imply a greater comfort with being in shared environments. Indeed, 78% of respondents report a personal comfort in the idea of coming back and report only a slightly lower (76%) of their employees feeling the same comfort level. This compares with the fall 2021 numbers of 71% and 54% respectively.
But remote work remains a big factor in corporate decision-making, “and investments will continue in that area, with strong support increasing slightly to 55%,” the data reveal. Of all of the iterations of remote work, the favorite option (for 33% of employers and 37% of employees) is three to four days in the office. Only 15% of managers and 16% of employees would opt for 100% remote work. But a considerably larger 28% of decision-makers and 24% of workers would opt for a 100% return-to-office.
Both the renewed awareness of the value of the office and the acceleration of hybrid work protocols inform tenants’ leasing strategies. On one hand, renewal intensity is back up, “close to its pre-COVID-19 levels,” says the report. “An impressive 72% of respondents said they are planning to renew their leases.”
As many as 54% of respondents prefer shorter lease terms–from three to five years–rather than going for traditionally longer stretches of seven to 10 years. Interestingly, new economic pressures are figuring into that decision more than concerns over COVID–which, in this survey, now ranked third in respondents’ list of concerns. Reduced overhead due to COVID-19 was a focus for 73% of respondents, while supply chain delays factor into decisions for 80%. Inflationary pressures topped the list at 83% of decision-makers.
How would they use their spaces? Some 85% either are or would consider increasing their professional development events, such as continuing education and leadership activities, while 83% either are or would consider working with their property managers to “brainstorm ways to make buildings, common rooms and other amenities more welcoming for, and better utilized by, tenant employees.”
Drilling down into preferred amenities, 70% of respondents would want to see more engaging and entertaining social programming on site, such as happy hours and concerts. Dedicated, well-appointed tenant lounges for multimedia and socializing are on the wish list for 69%, and a “powerful digital platform, including a catalog of vendors and services,” has appeal for 68% of survey-takers.
Despite COVID fears moving into the #3 spot of corporate concerns, health and wellness remain an issue, and given a hypothetical $100, decision-makers would still want to see property managers spend $20 of that on “additional infrastructure to safeguard against harmful pathogens,” although this is down $8 from last year’s survey.
They would also spend $13 to improve common, shared amenities, such as lounges, cafes and rooftop gathering spots–a $2 increase over 2021. Other areas that would get a piece of that $100 are improved technology connections to the building, ($12 this year, $11 last year); creating more flex and coworking spaces throughout the building “for offices to scale up or down as needed”($13 this year, $10 last year); and improving the tenant experience through strategies like new personal and professional development programs and networking opportunities ($12 this year, $6 last).
Clearly, the office sector has a road to travel in terms of occupancy before it approaches pre-pandemic levels. But it is also clear that, at last, COVID-19 concerns no longer dominate tenant issues, and property owners and managers continue to evolve to meet or exceed the changing expectations of their tenants.