Office Max: Who Wins WFH vs WIP?

In This Edition:

The War of the Cubicles

The Generation Gap Complication

Shifting Priorities Drive the Work Dynamic

The WFH Revolution Is Being Televised

Case Study in the Making: The Biotech WFH vs WIP Petri Dish

Final Implications

The War of the Cubicles

Work-from-home (WFH) and work-in-person (WIP) advocates are waging a war of the cubicles. The incoming U.S. presidential administration has hinted at requiring all government employees to begin working in person in the office five days a week. While several corporations have dabbled in stricter in-person work compliance, the solution is not anxiety-free.

The Generation Gap Complication

The generational gaps between Baby Boomers/Generation X and Millennials/Generation Z add to the complexity of finding a solution. The former group is retiring or nearing retirement, and the latter is beginning to ramp up their careers. Both cohorts have had dissimilar experiences, leading them to approach WFH and WIP in various ways.

I recently saw an IG reel where a guy shared that the “reason CEOs were pushing back to the office” is because “they want to OWN your time”.? He said COVID influenced the work-from-home (WFH) revolution by enabling people to realize they could be productive in their jobs and still manage to run errands and go to their kids’ sports practices and games.? Net, people owning their own time was a new revelation leading them to covet WFH.

While the above is one person’s perspective, I think the earliest WFH angst can be traced to the massive shift from the Industrial Age to the Info Age.? This shift is still happening and did not happen overnight as it perpetuated the seventies and eighties suburban office and home building booms, two catalysts that helped the Boomers and Gen X better “own” their time in the wake of longer commutes to downtown/urban jobs.??

Shifting Priorities Drive the Work Dynamic

The dynamic shift in technology and work led to dramatic decreases in the availability of manufacturing work giving way to automation.? In the United States, the shift helped exacerbate further changes within our inner cities which promoted many to “escape” to the suburbs.? The suburbs were the newly minted Federal Interstate Highway systems’ answer to validate their existence for new homes and white-collar jobs on the city's edge.? Commutes to the inner city were beginning to drag and more people chose to live further away.? The logical choice to better own one's time was to work closer to home.? Gleaming new office parks popped up on the periphery of major cities surrounded by vast parking lots to accommodate the commuting workers.? Author Joel Garreau wrote in 1992 extensively about the rise of “Edge Cities” on the periphery of American cities in his book “Edge City:? Life on the New Frontier”.? The American flight to the suburbs has had mixed results and its shortcomings only became more obvious during and after COVID.

If there was an “Exhibit A” for the failure of our previous suburban utopian work-person epic it would be the former Connecticut General Life Insurance Company’s Headquarters.? Connecticut General pioneered the suburban office park in a single stroke with the opening of its sprawling suburban Hartford HQ in 1957.? The author, Jane Jacobs in her book “The Death and Life of Great American Cities”, did justice in describing Connecticut Generals HQ’s long-term negative effects exacerbating the decline of inner-city Hartford.? Per Jacobs, it was not an efficient use of resources to move from an urban area to the suburbs as it required Connecticut General to add extensive services to their building “in the countryside beyond Hartford” that would otherwise not be found in the undeveloped area outside their HQ.? As a result, Connecticut General’s HQ included “a large general store, a beauty parlor, bowling alley, cafeteria and a theater and a variety of games space” to make up for the lack of proximity of similar services.? It was a self-contained work in-person utopia that required these extra in-house services because no longer could its workers simply leave the office and walk down the street to get them as they previously had in downtown Hartford.??

"If they want to compete,for a work force

on even terms or better, they

must be in a lively city setting where their

employees find the range of subsidiary conve-

niences and choices that they want and need.

...the differentials in cost of suburban

land and space are typically canceled by the

greater amount of space per worker required

for facilities that in cities no single employer

need provide, nor any one corps of workers or

customers support. Another reason why such

enterprises have stayed in cities,..."

Jane Jacobs, "The Death and Life of Great American Cities”

Connecticut General's inclusion of in-house services echoes what we’ve seen in recent years with the completion of our generation’s latest Connecticut General-like HQs in the forms of all-inclusive featured HQs for Apple, Google, and Amazon.? Not surprisingly Connecticut General spawned a generation of copycats; i.e., IBM’s HQ in Armonk, NY, Pepsi in Purchase, NY, Apple Park, Cupertino, CA., and Toyota in Plano, TX.

Staying on the IG theme, I saw not once but twice a reel of a young man standing outside downtown Chicago’s future new Google office in the Loop’s iconic Thompson Center.? The subject of the young man’s video was his speculation on whether Google would maintain the same best-in-class food court that had existed in the building’s former incarnation as an Illinois state government office building.? WIP food goals are important!

The suburban home boom fueled the growth of malls and large offices that were magnets for sprawl as businesses clamored to provide and duplicate services for the workers and nearby suburban homes.? I have experience working in both urban and suburban HQs and they have advantages and disadvantages.? I loved working in a downtown area where I had the choice to get outside on a nice day and walk to lunch versus eating in the corporate cafe.? Then there was the convenience of living in the suburbs and commuting a shorter distance versus downtown to a nearby suburban office.? That last one is hard to beat when you have a family with kids.

Fast forward to today and we have an up-and-coming cohort in the Millennials and Gen Z who in some cases grew up in the very suburbs their Baby Boomer and Gen X parents raised them.? And in classic generational resistance, many Millennials and Gen Z have shunned the suburbs favoring urban lifestyles that contrast with their parents' bucolic favor.? Even before COVID, we saw the impact of this as forward-focused companies like Amazon and Google were buying up, building, and leasing office spaces within the largest metro downtowns of America to attract the coveted Millennial and Gen Z stars.

The WFH Revolution Is Being Televised

The WFH revolution is being televised in the form of a myriad of COVID and post-COVID Zoom calls.? The move back to in-person work may not be as gracious on everyone’s time as the government and increasingly more corporations mull its cost and benefits.? Ultimately WIP’s success will be predicated on how its newest incarnation can improve on Connecticut General’s in-inclusive work white elephant to a degree that it is attractive enough to get workers to want to willingly return to the office or if it can be administered with a force as brutal as what we all experienced in March 2020 with the onset of COVID and the first WFH mandates.? In the latter’s case that could result in another revolution of negative proportions from a resistance movement of Millennials and Gen Z now too ingrained and cozy with WFH.??

Time will tell and if there is any certainty in this new future it is its unpredictability.? Will the Millennials and Gen Z evolve like previous generations and grow out of urban living as they raise kids or will they stay committed and continue to rebuild and inject new life into our urban landscapes??

Case Study in the Making: The Biotech WFH vs WIP Petri Dish

If there is a petri dish with answers to the WFH question it is in San Diego.? San Diego has a large biotech cluster centered around the University of California San Diego (UCSD), Torrey Pines Road, and the University Town Center, all in La Jolla.? There is also a cluster in nearby Sorrento Valley.? In the past five years, there has been a boom in pre-COVID planned new and competing biotech-targeted labs/offices being built in Sorrento Valley and Downtown San Diego.

I live within five blocks of two massive new downtown projects totaling over 2 million square feet.? Neither project has yet to sign a major biotech tenant.? So far it's all been retail.? To be fair one of the projects is not 100% complete, but both were planned before COVID-19 and the WFH transition.? Ironically one of the projects is a redevelopment of a former downtown mall.? So far one of the three new downtown biotech projects has inked a few deals.? Clearly, these downtown projects are betting on demand for biotech offices and labs in a downtown setting despite the legacy of the suburban cluster 15 miles away.??

The new offices in suburban Sorrento Valley 15 miles from downtown San Diego have had better success at attracting tenants as they already have 43% of lab space pre-leased (as of Dec. 6, 2024).? The demand between suburban versus urban in San Diego could have multiple catalysts as downtown San Diego is still recovering from urban post-COVID issues such as homelessness, and yet downtown is also experiencing a massive housing boom.

Final Implications

Regardless of what happens in San Diego, similar dynamics are playing out in other cities nationwide.? In the next few years, we will have a clearer understanding of where the WFH versus WIP pendulum will rest.? According to the insights above, we will continue to see more choices and the best of both worlds in the form of hybrid work given the Millennials/Generation Z are in the driver's seat as they are the cohort that is most in demand and can dictate their future.? The broader implication will be as they continue to mature as a group to what degree they will want to grow a family lifestyle whether that lifestyle leans more towards suburban or urban and to what degree that lifestyle is conducive to WIP or WFH.