A majority of execs will invest in office space despite economic downturn
Just 33% of US C-suite business leaders surveyed by EY say they will downsize their CRE investment.
More than half of executives polled in a recent Ernst & Young survey say they plan to invest in commercial real estate despite the current economic environment, while two-thirds say they are either leasing or plan to lease suburban office space.
Just 33% of U.S. C-suite business leaders surveyed by EY say they will downsize their CRE investment, while 58% say they will invest in commercial real estate, which could include enhancing or expanding the real estate footprint.
“The economic downturn will force leaders to make important decisions regarding their real estate portfolios — from investments, to space optimization, to workforce models,” says Mark Grinis, EY Americas Real Estate, Hospitality & Construction Leader. “Employers are beginning to understand that they need to earn the commute time of their employees, and many are investing in the ‘office of the future’ to achieve this.”
In addition, 64% say they are either leasing or plan to lease suburban office space, in what EY calls a move to ‘hyperlocal’ offices. Companies are also investing in-person events (50%), providing meals (45%), reimbursement for commuting costs (38%) and childcare support programs (33%), to encourage employees to commute into a physical office space.
The research is the latest in a slew of reports revealing that while the office isn’t going away, it will be used in a different way — and employee concerns are now far more likely to be taken into consideration than pre-pandemic when it comes to space planning. A recent Unispace report showed that 79% of employees admit they would be happier to return to the office if it was just five to 10 minutes from home.
Related: Remote work has officially dented commute times
The EY survey also found that 70% of employees are working from home at least two or three days per week. And 40% of companies surveyed are either using a four-day workweek or are planning to implement one. To accommodate ongoing virtual work methods, 69% of company leadership surveyed has implemented or is in the process of implementing hybrid work technologies like video collaboration platforms “to meet employees where they are.”