As markets and the economy continue to recover from the pandemic, businesses are looking for more space to rent for employees.
Data from commercial real estate experts SquareFoot, shows in the post-pandemic world, the number businesses in the US looking for office space is rising. The cost employers are paying for office space is also increasing.
Employers are Spending More on Office Space
The data shows that, post-pandemic, businesses in New York are paying 155% more for office space. Prior to the Covid-19 pandemic, commercial real estate tenants looking for offices had allocated approximately 100 square feet of space per employee. By the beginning of 2021, this figure had almost doubled to almost 250 square feet per employee.
SquareFoot’s study also shows that over the last year, businesses have expressed greater need for flexible and short-term leases.
Flexible Space to Accommodate Hybrid Models
The office space data provides important insight to small businesses in the United States. It shows how, as markets open following months of stagnation due to the pandemic, businesses are prioritizing flexible office space that accommodates hybrid model that is proving to be a popular post-pandemic working setup. Such working environments require more spacious areas, which businesses are willing to pay for.
SquareFoot reiterates the desire for larger workspaces to adhere to safety protocols and the need for employees to be safe and comfortable: “A hybrid work model advocates for more common areas, a variety of workspaces and conference rooms in addition to needing more space between employee desks for Covid safety protocols,” SquareFoot writes.
“Employers are trying to navigate what a combined remote work / in office approach will look like and what will make their employees comfortable and productive coming into the office each week.”
The amount being spent on commercial space per employee is steeply rising. According to the data, the amount employers are spending on workstation for individual employees increased by $900 in Q1 of 2020 to $1,400 in Q2 of 2021.
Rather than cutting real estate budgets to cater for a remote workforce, the figures testify that employers are increasing such budgets to accommodate for hybrid ways of working.
Making Office Space Flexibility a Priority
Office space flexibility is proving to be a key priority as businesses revaluate their needs and operations following months of unprecedented disruption. The hybrid working model is proving popular, giving employees the chance to enjoy flexible working locations without the isolation of working entirely remotely.
To operate a successful hybrid culture, employers need the right office space. They are typically looking for short-term leases. As SquareFoot’s data shows, they are will to spend more to secure such contracts and safe and comfortable workspace for employees.