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Here’s what you need to know today:
- Knotel Files For Bankruptcy
- Companies Are Embracing Four-day Work Weeks
- The Future Of Offices Will Need To Emphasize Safety
- Boston Properties’ CEO Anticipates Office Demand Rebound
- Why The Employee Experience Is Indispensable
- Industrious To Open A D.C.-area Office
Knotel Files For Bankruptcy
Flexible office operator Knotel and its U.S. subsidiaries have officially filed for Chapter 11 bankruptcy and will be acquired by an affiliate of Newmark Group.
Additionally, the company has filed a motion for approval of a stalking horse bid agreement with Newmark.
The Newmark affiliate has provided Knotel with a $20 million commitment for debtor-in-possession financing that is awaiting approval, which the office provider hopes will be enough to maintain daily operations during the acquisition process.
Knotel is one of many flexible office firms who have struggled to stay afloat since early last year, when the pandemic swept through the U.S.
“The pandemic created a uniquely challenging operating environment, with significant impacts on leasing velocity and the rate of renewals in key markets, particularly New York and San Francisco,” said Amol Sarva, CEO and cofounder of Knotel.
Companies Are Embracing Four-day Work Weeks
Affiliate marketing network Awin recently transitioned to a four-day schedule after months of experimenting with contracted work weeks.
The company did so with no decrease in salaries or service to clients, despite what misconceptions may say about this arrangement.
While this work arrangement is not new, the pandemic opened up more opportunities for companies to test out more modern work models.
According to COO Adam Ross, a four-day work week allows employees to have more time for their personal responsibilities and passions, while being more productive when working.
Not only does a four-day schedule benefit employees, but companies are also able to cut down on the overhead costs of operating a physical office.
Buffer, a social media marketing platform, has also recently moved to this arrangement after relaxing its productivity expectations over the past several months. The company operates with a Monday through Thursday schedule, adding Friday as part of the weekend.
“Our team is able to have the space to truly relax and recharge on the weekends and come to work refreshed on Mondays,” said Carolyn Kopprasch, head of special projects at Buffer.
Kopprasch said that employees have generally been happier and more productive with this model. The company has also been able to have a better understanding of which processes are most beneficial to operations.
The Future Of Offices Will Need To Emphasize Safety
While the office is certainly not dead, it will need to look much different when employees return. We are still a long way from the virus being eradicated, so preparing the workspace to be as clean and healthy as possible will be crucial.
Some companies have already altered their basic design to accommodate stricter health protocols, such as one-way entrances and pathways, as well as signage and floor markers reminding occupants to distance from others.
But these are just the basics. Keeping a low occupancy in the workspace will also be necessary. With the increase in remote workers also comes the need for technology that supports a distributed workforce.
At the very least, this should include a SaaS that helps teams collaborate on projects no matter where they are working from, video conferencing tools to conduct meetings, teleconferencing when video isn’t necessary.
Additionally, in order to decrease the risk of transmission, cleaning practices will need to be a top priority. This means using antimicrobial wipes and sprays, especially in high-touch areas.
Hiring a professional cleaning crew for daily cleanings will also guarantee that employees are safe when they are in the office.
Encouraging employees to also take matters into their own hands by cleaning up after themselves and installing sanitizing stations is another way to keep the office safe from any sort of virus.
Boston Properties’ CEO Anticipates Office Demand Rebound
Owen Thomas, CEO of Boston Properties, believes that the concern over the pandemic’s impact on office space demand is “overblown.”
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Thomas argues that business leaders are eager to bring their employees back into the office in order to better nurture collaboration and culture.
“Though employees may be working remotely more in the future, it will be difficult for employers to translate lower census into space savings due to employees’ desire for more privacy and a fixed workstation,” said Thomas.
Once vaccines are more widely available, he believes that leasing will start to grow as people feel more comfortable working in a physical office.
While the company’s FFO fell by 15% over the last three quarters compared to pre-pandemic levels, Thomas said the firm’s portfolio is still stable and that they have been able to collect over 99% of rents.
He added that activity actually improved during each quarter as investors slowly stepped back into the market.
“Office was no more out of favor then other asset classes after the pandemic as office transaction volume was 29% of total commercial real estate volume both in 2019 and the last three quarters of 2020,” said Thomas.
However, analysis from Mizuho Securities has indicated that as the pandemic worsens and vaccine rollout remains complicated, the office sector will continue to be impacted for much of this year.
Why The Employee Experience Is Indispensable
Over the past year, companies have come to fully realize that the crux of any successful business is a healthy employee experience (EX).
Adopting more flexible policies, equipping them with modern technology and ensuring that they are caring for their wellbeing helps boost morale and productivity of businesses
A joint report from Forbes Insights and Salesforce revealed that “companies that have both high EX and CX see almost double the revenue growth as those that do not.”
But the pandemic has made it harder for businesses to keep employees engaged, with a Gartner report finding that the appropriate employee experience will take more than just HR to navigate.
Technology is crucial to keeping distributed workers connected. Some companies have opted for Slack channels that range from project-related discussions to watercooler talk, while others have leaned into Zoom happy hours.
However, there is one other tool that may seem slightly more advanced, but offers a much bigger payoff.
The use of virtual and augmented reality can help employees achieve the closest possible connection with colleagues, without having to be in the same room as them.
VR can be used in a myriad of ways. For instance, VR can serve as a tool to train incoming and existing employees by demonstrating and emerging them into their new skills.
“Virtual reality (VR) can enable meaningful remote collaboration and provide an in-person experience, immersing users in realistic scenarios, allowing for employees to be upskilled and retrained faster,” said Tom Symonds, CEO of VR training platform company Immerse.
Industrious To Open A D.C.-area Office
Industrious has announced it will be opening a new 42,768 square foot office in North Bethesda, Maryland, just outside of Washington D.C.
Industrious Pike & Rose will be part of the 24-acre Pike & Rose neighborhood that is being built by the Federal Realty Investment Trust.
The company will take up the fourth and fifth floors of the LEED Gold-certified building and offer 141 private suites, 11 conference rooms and 18 phone rooms.
The building will also feature contactless entry and a modern HVAC system to mitigate the risk of virus transmission.
“Industrious is focused on expanding its footprint in vibrant suburban areas like North Bethesda to provide comfortable, safe, low-commute workplace options to those looking for a flexible alternative to working from home,” said Justin Stewart, co-founder and president of Industrious. “North Bethesda also fits perfectly as a location for the hub-and-spoke model we’re seeing companies begin to implement across suburban markets, and Industrious is an ideal partner to help companies make this transition.”
This news indicates that the company will be looking to accommodate the growing amount of hub-and-spoke models.
This will be the company’s second location in Bethesda, along with seven others it has in D.C.-area buildings.Share this article