Now is the time to rethink your portfolio
As the future of hybrid work evolves, organizations may now find that they have more real estate than they require or lack offices in geographies where workers now reside. Portfolio managers will need to answer where and how much space is now required to support the desired outcomes for collaboration, productivity, culture, and employee experience.
While the pandemic has shown an increased need for flexible leases, the reality is that right-sizing a real estate portfolio can lag 3-4 years following a recessionary cycle. But the lessons gained can ensure more agility and resiliency in the future to better weather economic downturns.
Identify the right portfolio strategy
Pre-pandemic office space was generally underutilized by as much as 40%, as most companies already embraced mobility or flexibility ahead of the pandemic. The impact of COVID has highlighted the need for and benefits of increased real estate and worker flexibility. The right strategy for your organization will be influenced by organizational goals, talent density and preferences, commutes, and worker activities. Supporting more frequent remote work has the potential to deliver significant cost savings. Going forward, organizations will need to justify each location by understanding what work must occur in an office and why.
Requires that all or most workers report to a central workplace full-time as a condition of employment.
Mostly retains the pre-pandemic real estate portfolio, but gives employees choice of if/when to return to an office, work from home, or work anywhere.
Offers centrally-located core offices with satellite locations closer to where workers live, which can decrease real estate costs by taking advantage of lower rents in suburbs or secondary cities.
Maintains an entirely remote workforce, widely distributed, working from home and/or co-working offices. In-person collaboration is done infrequently in spaces that are rented on-demand.
The future is a mix of traditional & flexible space
The future of office real estate is a spectrum of flexible spaces, ranging from on-demand workspaces and co-working memberships to short-term, flexible spaces and traditional space consumed flexibly making a mix of traditional and flexible space will important in commercial real estate portfolio strategies.
JLL ResearchThe Impact of Covid-19 on Flexible Space
Adding flexible space is a quick, easy, and low-risk way to acquire satellite or smaller offices to support your portfolio strategy. Flex space has the benefit of meeting elastic demand without the long-term capital commitments of traditional office leases.
Sustainability investments increase wellbeing, savings & valuations
Buildings account for nearly 40% of energy consumption and greenhouse gas emissions. Investing in green initiatives is not only a global imperative, but it also delivers quick ROI.
- New and retrofitted green buildings realize a 9% decrease in operating costs within a year and a 13% decrease over 5 years
- LEED Certified buildings realize increased asset valuations by 10% or greater
- Digitizing assets and services can curb energy consumption, perform health checks, and reduce CO2 emission levels
Committing to sustainability objectives now will help you win the hearts of your workers and and meet evolving government regulations.
Speak to an expert
Make the business case for change
Those with a corporate real estate roll will need to provide a high level of comfort to the C-suite and HR with an evolving work model. JLL helps companies navigate the deep and sometimes complex transformation needed to bring elasticity to the portfolio.