Down to Business: Hybrid work continues to evolve

Drug store retailer Rite Aid last month opened what it dubbed a “corporate workplace of the future,” moving its headquarters to Philadelphia from a suburb in central Pennsylvania.

In a nod to the COVID-19 pandemic and how it changed the rhythm of work, the new space is just 23,000 square feet and has no individual offices. Instead, conference rooms abound, equipped with the latest gadgets, to encourage periodic in-person collaborative visits. Otherwise, the company’s corporate staff, which numbers some 2,800, continues to work remotely.

That’s how many of us got through the early days of the pandemic, and we’ve come to like working from home.

According to the latest survey from the Work from Home Research Project, a group founded by academics in May 2020 to study the impact of COVID on working arrangements, 55% of full-time workers were back at the office as of June, while 15% remained fully remote. The other 30% were in a hybrid mode, working just part of the week in the office.

The survey, done monthly, also indicated a narrowing gap in June between employers and employees on where work should take place. The currently accepted hybrid is 3-2: three days in office, two remote.

A paper the project’s three founders wrote last year for the National Bureau of Economic Research said a lot in its title: “Why Working from Home Will Stick.” In it, they predicted that 20% of all labor in the U.S. will be done by remote workers post-pandemic, up from 5% before COVID hit.

Remote work obviously has an impact on office leasing, which initially was thought to be in for a reckoning.

CBRE, the national commercial real estate services firm, said early fears that hybrid work might result in widespread space shedding failed to pan out, with just 9% of companies in a survey last year saying they anticipated significantly reducing square footage.

“The workspace designs necessary to support a hybrid work model are forcing many to re-evaluate earlier plans to reduce their real estate footprint,” CBRE wrote in a guide to adapting to the new normal.

Locally, commercial real estate shuddered a bit at the start of the pandemic, as evidenced by subleasing availability.

While subleasing had a scant role historically in the region, it jumped in the first half of 2021 as companies found they needed less space but were locked into leases, according to CBRE-Albany’s local market report. Between January and June last year, sublease availability more than doubled to 540,700 square feet from 207,400 square feet in late 2020.

By the end of 2021, though, many sublease spaces were absorbed or removed from the market “as some clarity returned” on occupancy “in the form of a hybrid workplace model,” according to the company.

Sublease data for the first half of 2022 is not yet available, but the downward trend likely continued, Richard Sleasman, president of CBRE-Albany, indicated this week. 

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].

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