Ernst & Younger just lately introduced that its second annual EY Future Office Index revealed surprisingly optimistic attitudes from firm leaders on business actual property funding regardless of financial issues. The index screens govt sentiment and behavioral information across the office of the longer term.
Regardless of a slowing U.S. economic system and an anticipated recession in 2023, the macroeconomic outlook is forcing CRE leaders to look extra intently at their workplace portfolios from a brand new perspective, based on Ernst & Younger. The Index revealed that solely 33 % of U.S. C-suite enterprise leaders plan to lower their CRE investments, even within the present rate of interest atmosphere and amid inflation. In the meantime, 58 % of leaders say they plan to put money into CRE, which may embrace enhancing or increasing the actual property footprint.
“The financial downturn will pressure leaders to make vital choices concerning their actual property portfolios — from investments to area optimization, to workforce fashions,” Mark Grinis, EY Americas Actual Property, Hospitality & Building Chief, stated in a press release. “Employers are starting to grasp that they should earn the commute time of their workers, and lots of are investing within the ‘workplace of the longer term’ to attain this.”
The most recent EY Future Office Index additionally revealed that greater than 70 % of workers are working from house at the very least two to 3 days per week. It is a important improve from the final 12 months’s index, which discovered that solely 42 % of employers used the hybrid work mannequin.
New and sophisticated working patterns have affected firms’ actual property methods, together with how a lot workplace area they want and the way a lot it should price to make use of it. Moreover, roughly 60 % of respondents stated they’re both utilizing, or will quickly be utilizing, reservation programs for area utilization and/or occupancy monitoring.
Extra companies are headed to the suburbs
Greater than 60% of EY’s survey respondents stated they’re leasing or considering of leasing suburban workplace area for the reason that COVID-19 pandemic. Employers’ response to the deurbanization of the workforce has been to put money into hyperlocal workplaces to encourage workers to return to in-person work. Corporations see the bodily workplace as a key issue of their means to succeed now and sooner or later. Additionally they imagine the connection workers get from working in particular person is well worth the funding.
Along with predictable flexibility, firms are additionally investing in different avenues, comparable to in-person occasions (50 %), offering meals (45 %), reimbursement for commuting prices (38 %) and childcare assist packages (33 %) to encourage workers to return into the workplace.
Versatile working fashions stay enticing to workers
The index revealed that 64 % of executives imagine versatile working choices encourage workers. The mixture of flexibility and know-how is a high precedence. Moreover, numerous companies need to use well being and well-being administration apps, together with different hybrid applied sciences like digital and digital collaboration sources to optimize their workplaces.
For instance, 44 % of firm leaders have activated or are starting to put money into the metaverse for social interplay, coaching and/or recruiting functions, and 62 % have activated or are starting to put money into well being and security improvements and monitoring, comparable to indoor air high quality and touchless workplaces.
Companies are providing shorter workweeks
Employers are doing what they’ll to draw and retain their workforce. One tactic has been to implement a four-day workweek, which 40 % of the index respondents stated they’ve began doing are within the means of doing. Corporations now discover themselves able the place they’ve to supply some type of hybrid mannequin, or they threat dropping employees to companies that may supply it. Moreover, virtually 70 % of firm management has carried out, or is implementing, hybrid work applied sciences, comparable to video collaboration platforms and digital whiteboards to fulfill workers the place they’re.
“Knowledge is paramount to understanding your workforce and creating the perfect area for a brand new period of labor,” Francisco J. Acoba, Principal, EY Americas Technique and Transactions and Co-lead – Company Actual Property Consulting and Know-how, stated in a press release. “Knowledge-driven insights that uncover workers’ work habits will form how executives design and method the office shifting ahead.”