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Page 14 — Office & Industrial Quarterly — June 2021 www.crej.com OFFICE — WORKPLACE TRENDS M etro Denver’s economic engine is beginning to hum louder after more than a year of financial hard- ship for many companies, brought on by COVID-19.With more people getting vaccinated, infection rates declining and restrictions on businesses lifting, there are a lot of reasons to get excited about the next few months and the return of some- thing closer to normal life and busi- ness operations. Accordingly, many business leaders are thinking about their strategies for returning to their offices – or consid- ering if they need to go back to the office at all. After months of remote work for most office workers, this topic is more complex than it sounds, with many new variables to think about as the reality of workplaces has shifted because of COVID-19. The first step to assembling a plan for returning to the office is ask- ing key questions that will serve as a guide. Here are three of the most common questions that business leaders should answer as they develop a return-to-the-office strategy. n Howwill you ensure employees’ health and safety in the workplace? One of the most important aspects of returning to the office is ensuring there are systems and infrastructure in place to keep employees safe and healthy. Although masking and dis- tancing guidelines have been relaxed generally, every county, city and even some office buildings can make their own requirements, and they can change with little notice. Beyond governmental requirements, it’s also important that employees feel comfortable in the office. Everyone has a different level of risk tolerance and comfort when it comes to the ques- tion of masking and social distancing, so business lead- ers need to listen to their employees to get a true pulse on how their workforce feels and act accordingly. Many office buildings have upgrad- ed their HVAC and filtration systems to pave the way for companies look- ing to return to offices with increased health and wellness practices. Com- panies should assess what improve- ments have been made in their build- ings and if there’s anything further that needs to be done. Basic things like sanitizer and cleansers should be standard. Most offices kept these items on hand before the pandemic, but they are likely to be used more frequently now. Some companies are even thinking through space flow to help moti- vate hygienic practices. For example, employees may start entering the office through the break room so they can easily wash their hands before starting the day. n Should you consider changing your workplace model? “Returning to nor- mal” is everyone’s goal right now, but it’s important to be realistic about the fact that we’re looking at a new set of challenges when it comes to work- place models and office usage. There always will be a place for offices in American commerce, and they remain the best place to collaborate with col- leagues, build company culture and morale, and provide crucial training and management functions that serve the pipeline of talent in any industry. But many companies are learn- ing that some of their workers enjoy working remotely, particularly for focused tasks, while others miss the office atmosphere and want to see their co-workers. Enter the office real estate topic du jour: hybrid working. This model simply involves some employees working remotely while others come into the office. In some cases, those workers may switch plac- es depending on what kind of work they have to do or even the day of the week. Another potential model is hub- and-spoke, in which companies main- tain a central office, likely downtown, while establishing several smaller offices in the suburbs. This is popular among workers who either moved or have always lived away from the city center and have become accustomed to no longer having a commute. Finally, the idea of coworking, which gathered significant strength before the pandemic, still is an option for many companies. Since so much is still in flux, companies that are unsure if or how their head counts will change over the next 12 to 18 months might appreciate having short, flexible lease terms that allow them to adapt to changing conditions. n What kinds of changes will your office require? Some companies will be able to go back to their offices 3 considerations for planning your office return A fter a long, often dark and largely lonely year, we all can finally see the light at the end of the tunnel. The vaccine is here and widely available, Denver is now at level “clear” and with return-to-work campaigns being led by groups like the Downtown Denver Partnership, we are on the precipice of some sense of normalcy. On one hand, that’s great news – certainly, for mitigating loss of life and supporting the well-being of people and businesses. But also it raises a lot of questions about the longevity of the new routines we fought hard to build – from the way we work to the way we interact with one another.Will we all head back to the office en masse now that we’re free to do so?Will flex- ibility to work from home become the expectation from the workforce?Who will be able to work from home and for how long?What are the human resource implications? Our perspective has been to look at the past year more like a traumatic event. On Sept. 12, 2001, no one was comfortable heading back into a big office building.We were deeply affected and rightly so. It was a hor- rible event, but we healed. Eventually, we headed back and got back to our lives.With nearly 600,000 dead in our nation alone as a result of the pan- demic, this event should absolutely be considered a national trauma. And as before, we will heal again. Ultimately, we believe that most companies eventually will resume completely full in-person work or something close to it. There is simply too much of the human experience that we can’t replicate with virtual tools. But follow- ing the pandemic, we still have a rare opportunity if we choose to take it.We can evaluate what did work during this difficult time.We can make changes for the betterment of our organizations and our people in the short term and begin to reshape our approach to work long term. By pulling insight from the folks working day in and day out with companies across the spectrum who are grappling with what comes next for their organization, we can get a clearer picture of the strategy that will work best for our own organizations. n Predicting back-to-office timing. Let’s start with the short term. Most workplace strategists are coalescing around the idea of a hybrid office model – at least initially. Employees are certainly on board. Fully 92% of employees surveyed by Smartway2, a workplace scheduling company, said that they would prefer a hybrid arrangement of some kind. While we’re generally heading back to the office in some form, there are two large unknowns. First, is the tim- ing – when and at what rate. The second is how – what will it look like, how will it work (and for how long). The former is easier; albeit the answer will vary from company to company. In Colorado, as of mid-May, approximately 43% of the population was vaccinated. Assuming we con- tinue to make progress toward herd immunity, and given the recent lift- ing of a majority of restrictions at the city and state levels, we can expect companies to resume a more normal office routine by summer. While timing can be roughly figured out, the harder part is how we’ll office when we get back. n Who goes back and how? Groups that are largely mobile, possibly sales- oriented or others that have culturally thrived out of the office prior to the pandemic finally may be compelled to shed office square footage. Conversely, collaboration-based, largely interactive or proprietary materials companies will flood back to the office. There are some for whom the deci- sion will be clear-cut. However, most will be less so. For those, the path will prove harder to forge. They will be facing a hybrid solution; but no two hybrids will be alike. Denver workplace-solutions provid- er Elements recently came out with a research-based report, Hello Hybrid, along with a workbook to help organi- zations navigate potential changes. Among the questions it recommend addressing are: •What does “flexibility” mean to your organization? • How much remote work will you allow? • Do your facility and real estate needs change? • Does the organization need to be trained to lead/manage differently? • Do expectations for the organiza- tion change in a hybrid model? The very different responses each organization will give to these ques- tions illustrates just how challenging this process will be. There is no right or wrong way; it’s about what will work for your organization. The companies in this hybrid zone that are most in tune to their cultures will be most successful at carving out their response. n Planning ahead for your office of the future. Talking to the brokerage side yields further insights into both the challenges and opportunities. For those companies in a lease transition, making major changes, particularly major downsizing, is a risk. With real estate expenses aver- aging 8% of a company’s budget, the appeal is tempting. However, the result of locking into a five-, seven- or 10-year lease that substantially reduces square footage also may limit your options (and cost you) should the post-pandemic hybrid/ remote work experiment ultimately fail. Tributary Real Estate notes that some of its clients are starting to make more long-term real estate decisions, while others remain wary of making big changes. For compa- nies that know an in-office presence (even in a smaller footprint) will continue to be a major part of their strategy, there is significant opportu- nity right now. This is the best time to find and lease new office space, as rents are entering negative growth territory and will probably remain depressed for some time. Vacancy rates, par- ticularly for high-quality product, are expected to spike in 2021 as new construction comes on line For hybrid work plans, no 2 companies are the same Amy Aldridge Partner, Tributary Real Estate Martin Goldstein Founder, Venture Architecture The marketing for Rev360 on Brighton Boulevard highlights the property’s health, safety and wellness upgrades. Please see Aldridge, Page 19 Please see Goldstein, Page 19