Tech Is Shaping a New Normal in Office Space—and Flexibility Is Key for Tenants, Says JLL’s Torrey Littlejohn

Office tenants are weighing changes in space needs and design. But most employees just want to come back to the office, says JLL's Torrey Littlejohn.

Office tenants have used technology to manage the pandemic’s impact on 2020. As they look forward, they’re weighing changes in space needs and design. But most employees just want to come back to the office.

JLL’s global survey shows that more than half of office workers miss their office, and nearly two-thirds of millennials can’t wait to return, says EVP Torrey Littlejohn. While some tenants are reducing office space due to the pandemic, Littlejohn believes that will be offset by job creation and de-densification—minimizing the aggregate impact.

One of the commercial real estate experts featured in “21 on 2021,” Littlejohn has a rundown on what’s next for CRE and the tenant experience in our Q&A.

How has the pandemic changed the needs of office tenants? Will those changes last long term?

Accelerated trends in remote and flex working, as well as technology, may impact the overall design of office space. Yet, these changing needs are unlikely to have a considerable impact on the aggregate level of space required, although the function and design may change.

In JLL’s global survey of 3,000 office workers, 58 percent of employees said they miss the office, and 64 percent of millennials are eager to return. To me, this means the traditional office is not going anywhere, because people want and need to maintain the intangible connection to their jobs.

In my opinion, in the short term, some companies may reduce space requirements as a knee-jerk reaction, but job creation and de-densification are likely to balance this out. So at the aggregate level, the impact is minimal.

How is technology shaping the new normal for commercial real estate?

Over the short term, the adoption of new technologies will both facilitate remote working and ensure workers’ well-being and efficiency on their return to office buildings. Over the longer term, demand is expected to gravitate toward technology-heavy smart office buildings, reflecting their ability to support companies’ environmental, sustainability, and health and wellness initiatives. Therefore, reduced demand for lower-quality assets seems likely over the longer term.

One silver lining throughout the pandemic has been the accelerated adoption of new technology. Companies offering video conferencing and collaboration have experienced a boom in popularity that may have taken years to achieve otherwise. A huge benefit is that colleagues are more accessible now. The most junior person in an organization is now more digitally equipped to get ideas and thinking to senior decision-makers, which is making the exchange of ideas more circular, less hierarchical, and more frequent.

From a personal perspective, technology has become a more embedded part of my flexible work life. It has provided mobility, accessibility, and productivity for me remotely that I didn’t realize would be possible just one year ago.

What other trends do you see in terms of tenant needs across sectors?

Flexibility is key. As companies begin and continue the re-entry process, we’re seeing more flexible work schedules to accommodate employees’ personal obligations and social distancing with office spaces.

What do you anticipate for DFW in terms of expansions and relocation?

I think Dallas will be the beneficiary of expansions and relocation. Our economy has a large, diverse, educated workforce. Our cost of living is still relatively low, we’re centrally located, and our tax structure is attractive to companies. We’ll continue to be at the top of the list for companies looking to reduce their cost structure and provide a great quality of life to employees.

The interview has been edited for brevity and clarity. A version of this story first published in the Fall 2020 edition of the Dallas-Fort Worth Real Estate Review.

Sandra Engelland contributed to this report.

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