Tag Archives: office space

How CRE in Massachusetts Navigated a Year of Pandemic and Social Unrest

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Industry Responded with Kindness, Creativity and Courage

By Tamara Small | The below was originally published in Banker & Tradesman on December 20, 2020.

This time last year, no one knew what 2020 would hold. Instead, as an industry we predicted an expansion of the office as a talent recruitment tool, fast-paced industrial growth, and a continued tightening of the housing market.  

While some of these predictions were accurate, the COVID-19 pandemic quickly turned others on their head. One thing is clear; 2020 drastically changed expectations and the way the world did business.  

Instrumental in COVID-19 Response 

When the COVID-19 pandemic hit Massachusetts, no one knew how to respond. Frontline workers, who are still risking their lives every day, did not have enough masks to do their jobs safely. Families were thrown into chaos – with kids home from school, online learning developing on the go, and jobs thrown into uncharted territory. And no one needs to be reminded of the stampede on basic necessities.  

Commercial real estate companies across the commonwealth rose to the occasion. Within days, JLL released a new platform to increase communications and resources between tenants and landlords. Within weeks, Federal Realty Investment Trust worked with the city of Somerville to bring a mask decontamination system to the Greater Boston area – which has been instrumental in providing health care professionals the clean, safe equipment they need. Boston Urban Partners started Family Meal, a six-episode series of live–streamed cooking classes with local, award winning chefs (including Jodie Adams and Andy Husbands) to raise money for No Kid Hungry. These are just a few of the extraordinary acts of company kindness we have seen. 

But that is not all. Automatic doors, new air filtration systems, hand sanitizer stations and socially distanced work areas have been implemented in office buildings and common areas. Residential property owners have taken the Boston Housing Stability Pledge to ensure resident safety during this public health crisis. Commercial owners worked with small businesses to help provide needed relief to survive this crisis. New platforms and protocols for curbside pickup, online and in-person shopping, and dining have all quickly been implemented and continually refined as new public health information becomes available. As CEO of NAIOP Massachusetts, I am proud to represent an industry that stepped up in a global health crisis to do its part.  

Economic Development Becomes Economic Relief 

On March 4, Gov. Charlie Baker released his proposal for an economic development bill. Within weeks, it became clear that an economic relief bill would instead be required for Massachusetts’ businesses and residents – just one of many necessary legislative and executive actions.  

But in the background of COVID, the housing crisis deepened. An Act to Promote Housing Choices, which was originally filed by Baker and is now in conference committee, is targeted at lowering voting thresholds in key zoning votes, allowing for increased production of critically needed housing. If it does not pass, expect the production of housing to slow.  

The conversation around transportation changed in some ways, and in other ways not at all. Suddenly, with massively decreased ridership (and little-to-no road congestion), the MBTA was faced with enormous revenue shortfalls. Proposed service changes have been met with opposition, but a modified version of the changes was approved last week. It is clear that our overburdened system will continue to face tough choices into next year.   

What quickly became clear is that the uniqueness of this crisis requires a cautionary approach to policymaking to ensure there are no unintended consequences or long-term impediments to economic growth and stability. The only path to a sustainable recovery is to create a climate for job creation and economic opportunity for all. NAIOP will continue to work with policymakers to ensure thoughtful, practical economic relief is implemented.  

DEI Efforts Come to the Forefront 

In June, society’s attention finally focused on what we have collectively ignored for far too long – hundreds of years of brutality, racism, and inequity throughout the United States of America. While COVID-19 pushed us into unusual and unprecedented times, the systemic issues being protested were with us long before the pandemic.   

NAIOP asked its members and colleagues to listen, learn, engage their leadership and support MWBE businesses. We have seen member-companies like VHB quickly take action to communicate with their employees and the public about its commitment to continuing to be active participants in advancing racial justice and social equity – and it did not stop there.  

Industry conversations on successful diversity initiatives saw over 300 live virtual participants and over 200 after-event watches. More and more companies started reviewing their internal practices and the industry is committed to diversity, equity, and inclusion. The time for real change is now.  

While 2020 was in many ways unexpected, CRE rose to the challenges faced by our communities, our colleagues, and our friends and family. While it is hard to know what 2021 has in store for us, we here at NAIOP know that CRE will continue to evolve and endure.  

Office Space: Dead on Arrival or a New Frontier?

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Tenants Are Getting a Crash Course in Remote Work’s Pluses and Minuses

Written by: Tamara Small | This article was originally published by Banker & Tradesman on October 4, 2020

As we approach the seven–month mark since the state of emergency was declared and office workers transitioned to Work from Home (WFH) overnight, many people are asking the same question: Will workers return to the office?  

A review of statistics paints a bleak picture. Office sublease space is at a record high. Occupancy rates in Boston and Cambridge remain in the single digits, while in the suburbs, it’s about a 10 percent occupancy rate. Companies that once said they would come back after Labor Day are now pushing tentative return dates out to January or well into 2021. We have seen the largest quarterly increase in vacancy rates since the fourth quarter of 2001.  

Given the uncertainty about what is to come, few transactions are happening. Rents are beginning to drop and short–term leases, once unheard of, are becoming much more common. Small businesses that support office workers from dry cleaners, to sandwich shops, to shoemakers remain closed. The economic impact cannot be overstated.  

Eric Rosengren, President of the Federal Reserve Bank of Boston, recently commented on the impact of so many empty office buildings.  

“It’s going to be very difficult for Massachusetts to fully recover until Boston fully recovers,” he said. “And a full recovery in Boston requires people to occupy the office buildings we have downtown.” 

However, we are now starting to see more people return, slowly, but surely, to their offices. And, when there is a vaccine, and children return to school and daycare, and commuters get back on public transit, as an industry we will have a unique opportunity to use what we have learned during this time to make offices better than ever. But what do we do in the meantime? 

While only 4 in 10 Americans can work from home, for those who have that privilege, the overnight transition to WFH was fairly seamless. Many companies who had never offered WFH as an option realized that work can, and will, get done remotely. Technology experts have become the glue that holds the office together – constantly adapting and innovating to accommodate cybersecurity, equity and access challenges.  

Tenants Discover Downsides 

There is a lot of positive that came out of this overnight shift. Several studies show that by eliminating commutes, some workers have gained invaluable personal time. Traffic congestion in our cities has improved dramatically, and many municipalities are expanding their alternative transit options, adding bike lanes and expanding walking paths to encourage outdoor activity. 

However, the longer WFH continues, the more we start to hear about its negative impacts.  

First, the boundaries between work and home have blurred. People are working more, and they are exhausted.  

Second, onboarding and mentorship are suffering. Bringing a new person onto a team that is completely remote is extremely challenging, as is mentoring a more junior employee or intern.  

Third, and most importantly, the collaboration and personal connections that shape successful office culture are difficult to replicate in a remote world. Remote work prevents learning by osmosis and diminishes opportunities for teamwork by eliminating those invaluable five-minute conversations that engage people across teams and disciplines. This has a significant impact on employees, particularly those new to the workforce.  

A recent study of employers by MassDOT/MBTA shows that very few companies plan to switch to WFH entirely when the world returns to “normal”:  52 percent of employers surveyed will send all employees back to the office;  41 percent will send some employees; and only 3 percent will remain full-time WFH.  

Embrace Office Innovation 

Clearly, employees will come back to the office, but work from home is here to stay. People want flexibility, but also some human interaction and collaboration. Are our office spaces ready to rise to the challenge? In short, yes. I predict employers will increasingly adopt a hybrid model that includes some remote and some in–person days. This means a total revision of what office space looks like, how it works, and how employees interact.   

A new and revived office sector will include an increased focus on wellness, collaboration, technology, and community. These components are critical as space becomes more fluid and flexible.  

At a recent NAIOP event, a panel of local experts shared what they are already beginning to see for the future of the office. Elizabeth Lowrey of Elkus Manfredi said, “the days of stack–and–pack are over.” Vickie Alani of CBT shared that we will likely see home offices remain dedicated spaces for focused work, while office spaces will be designed to enable remote and in–person collaboration. Kimberly Smith of Knoll focused on the enhanced role of technology to ensure that people at home and at the office “have an equitable experience in their office interactions.” And moderator Lauren Vecchione of Colliers Boston summed it up with the following statement: “If you take anything away from the discussion today, it should be that employees will come back to the office.” 

So, while the next few months may be a challenge, now is not the time to ring the death knell for the office sector. Instead, it’s time for CRE to embrace innovation and give the people what they want – a new and improved office for the next generation, today.