CBRE’s 2022 Spring US Occupier Sentiment Survey shows that the majority of companies are readily embracing hybrid work, which could lead to dwindling office space demand.
The survey showed that nearly three-fourths (73%) of companies plan to adopt some type of hybrid strategy within their policies.
Stefan Weiss, senior economist at Econometric Advisors, predicts this shift could decrease office space demand by around 9% when considering the average amount of time workers spend in the office under this policy.
According to Weiss, hybrid employees will cut their office time by an average of around 24% and work remotely an average of 1.6 days a week.
“There won’t be a one-for-one reduction in space needs for employees because of what we call the efficiency factor. This is the ability of companies to convert less physical time in the office to less physical space,” said Weiss.
“Because of the need to accommodate peak occupancy days, the efficiency factor is at about 55%, meaning that if you have equivalent of 100 less people in the office, you could only remove 55 desks.”
Weiss also anticipates that a dip in demand won’t happen overnight. Companies will need time to map out their near-future occupancy strategies, understand exactly how their space is being used, and right-size their offices.
Although the regions with the fastest job growth are intertwined with their virtual work prevalence, Weiss suggests city economies that embrace hybrid work are expected to outperform the US office market as a whole in the next few years.
