As large companies plan to reduce office space, asking rents should pick up by 2025

Large companies have significantly adjusted their view of the impact the pandemic will have on their office needs since the vaccine rolled out, according to a survey by commercial real estate company CBRE.

While fewer large companies plan to significantly reduce their office footprint with the advent of vaccines, the majority have said they will make cuts. CBRE predicts that the increase in remote working will translate to 9% less office space per worker, a trend that will be partially offset by an increase in hiring during the economic recovery. He predicts that asking rents in the office sector will return to pre-pandemic levels by 2025.

CBRE’s spring survey of 185 US-based companies followed a survey in September. The share of large companies planning to make modest reductions in office space over the next three years has risen to 72%, from 45% in the previous survey. On the other hand, those planning to make big cuts fell from 39% to 9%. In comparison, small businesses were more likely to maintain or expand the same footprint over the next three years.

Julie Whelan, global head of occupant research at CBRE, said in a statement that the results showed companies realized they needed to conserve more office space than they previously thought.

“Many companies that are now redesigning and functionally redesigning their offices will find that the square footage needed to accommodate team-centric work, open-address seating and meeting spaces often exceeds that previously dedicated to rows of desks and individual cabins, ”she said.

The survey also found that most companies believe employees will spend at least half of their time in the office. Thirty-eight percent said workers were likely to spend three or more days in the office. CBRE’s own data science and forecasting unit predicts a similar future for office workers, predicting that they will spend an average of 3.2 days a week in the office, up from 4.2 before the pandemic.

“This will result in businesses using 9% less office space per worker,” CBRE said in a statement. “However, the impact on office demand will be more than offset in the coming years by an increase in hiring as part of the economic recovery and the evolution of office floor plans that provide more space between workstations and sufficient space for group-centered work.

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