Real estate: evaluating the office landscape

July 2023

The COVID-19 pandemic drastically shifted the way in which many businesses operate and view remote work schedules. Many companies that used to require employees to be in the office five days a week have adopted some variation of hybrid work, meaning some days in the office and some days working remotely. Three years after the start of the pandemic, it appears that a hybrid working environment is becoming the new norm for many employers.

As part of the shift to hybrid work schedules, many companies are reevaluating their current office space needs. Perhaps unsurprisingly, many have begun or are planning to downsize their office footprint over the next few years. This means that office, one of the four main property types found in institutional real estate portfolios, is likely to experience a significant structural change. This may translate into a decline in future office construction projects, reductions in overall office utilization, as well as redevelopments and conversions of office spaces into other property types.