We’ve seen plenty of thinkpieces regarding the “death of the office building.” For security integrators and dealers, this means the potential loss of commercial enterprise clients. However, despite the prevalence of hybrid work, the office still remains an important part of a company’s operations.
In fact, the thinkpieces might be wrong: Although 18 percent of companies plan to shrink their real estate footprint, another 10 percent plan to expand. This means 72 percent of commercial buildings remain unchanged — a far cry from the “death of the office building” stories.
The office obituaries don’t mention an important statistic. According to property management firm CBRE, office leasing in the United States in 2021 actually increased 27 percent from the year before. CBRE also says that tech companies are gobbling up this spare square space, which is very different from tech giants like Meta and Twitter pledging to go virtual.
Tech companies held 36 of the 100 largest office leases in 2021, doubling the number from the year before. That’s 11.4 million square feet of conference rooms, offices, server rooms, shared workspaces and kitchens. Meta, Google, Microsoft and many other tech firms have quietly expanded their physical footprint, sometimes significantly. Only Basecamp is the rare outlier that has relinquished all of its real property.
In Forbes magazine, the head of investments at Cadre, a real estate investment firm, says that “most signs are pointing to another strong year in commercial real estate,” propelled by real-estate fund managers seeking growth opportunities. Cadre projects growth across several sectors, “driving price appreciation past pre-pandemic levels.” Multifamily and industrial properties will pave the way. Although cities like New York may lag, the property market in Phoenix, Atlanta and Charlotte will be hot as jobs and populations migrate to these cities.
A boom in the market for industrial properties such as warehouses and final-mile distribution centers is also buoying the commercial real estate market, according to Dealpath, which creates software for real estate investment management. Taylor Johnson, a PR firm in the real estate space, says that healthcare facilities and life sciences firms are scooping up and building new property to address the redoubled focus on health and wellness.
In the meantime, while hybrid work has precluded a full-fledged return to the office, traditional office-based businesses such as law firms, accountants, trade associations, finance, government and media are not shedding space en masse. They are taking a measured approach to leasing. In fact, some have moved into so-called trophy properties to entice workers back to the office with premium amenities. Additionally, many industries, like healthcare, nursing and hotel entertainment, can’t give up their spaces, which allow people to heal, recover, thrive and relax.
Almost 60 percent of the 550-plus survey respondents in a report on security trends currently use a hybrid work model, and nearly two-thirds report that access control is extremely or very important to maintaining hybrid work. Sixty-five percent of respondents say that access control and its integration with other technologies have been very important or extremely important toward enabling a hybrid workplace since 2020
Offices and commercial buildings remain a viable source of business for integrators and dealers, despite what the front page of the daily paper might say.