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Office Recovery: The Great Experiment

Key takeaways: • The great hybrid work experiment is beginning, with most companies (58%) saying they will implement a hybrid model of work. • In this experiment, flexible office spaces are expected to make up about 6% of future total office space in the market. • Office vacancy is predicted to increase by another 5.7% over the next few years, a forecast that is holding steady from our June 2020 report. • When making decisions on office space, employers rank employee productivity, culture, and collaboration as more important than operational savings.

Key takeaways:
• The great hybrid work experiment is beginning, with most companies (58%) saying they will implement a hybrid model of work.
• In this experiment, flexible office spaces are expected to make up about 6% of future total office space in the market.
• Office vacancy is predicted to increase by another 5.7% over the next few years, a forecast that is holding steady from our June 2020 report.
• When making decisions on office space, employers rank employee productivity, culture, and collaboration as more important than operational savings.

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Figure 6: The motivation behind returning to the office full-time,

by industry

Technology

Other services

Industry

Finance,

insurance and

real estate

Healthcare

Professional

services

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Our business needs physical human presence

Productivity has declined

The ability to generate ideas and innovation

The culture has deteriorated

6. Almost half of the tenants surveyed indicated

they want to keep the same amount of office

space, with 29% saying they need less space than

what they currently lease.

Tenants are feeling more optimistic about their

need for office space. In June 2020, 46% of tenants

surveyed were looking to decrease their office

space compared to 29% in April 2021. Furthermore,

in June 2020, 32% of tenants were looking to keep

the same amount of office space compared to 49%

in April 2021.

“Tenants are feeling

more optimistic about

their need for office

space.”

Figure 7: Tenant analysis on their future space needs

100%

90%

80%

70%

46% 41% 49%

60%

50%

40%

30%

20%

32% 37%

29%

10%

0%

22% 18% 19%

4% 3%

June 2020 November 2020 April 2021

Need more space

Need less space

Not sure

Keep same office space

Colliers Real Estate Management Services | Office Recovery: The Great Experiment Spring 2021 8

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