Return to Office and the Growing Demand for Commercial Leases

In-person work models are slowly but surely coming back to the cultural zeitgeist. With companies like Goldman Sachs and Apple requiring employees to return to the office, the tide is once again turning for commercial real estate.??

Still, there is incredible uncertainty about the future of CRE as professionals navigate the evolving challenges of working in a post-covid environment. However, as corporations reinstate the value of physical working spaces, the demand for office leases is once again climbing.??

At the same time,?this evolution presents a strong opportunity for tenants to take advantage of low prices.?As professionals reassess the role of commercial real estate in future production and company culture, market conditions empower those who wish to expand to save.?

1. The Pressure to Return to the Office

2. Corporate Leasing Demand Grows

3. Commercial Lease Expirations on the Rise

The Pressure to Return to the Office??

Goldman Sachs is one of the most recent household names to re-implement a five-day-a-week in-person schedule. The financial services firm has consistently proven itself to be on the cutting edge of CRE trends, so when they make decisions like this- it's time to take notice.??

The investment banking behemoth spearheaded the?corporate migration to Florida. It was in the first wave of companies to see the favorable regulatory environment and low taxes of the sunshine state as a novel opportunity to cut costs.??

Following its move to reduce its presence in NYC while laying down roots in Florida, 300 financial services firms followed. (And more are moving). So, essentially, the powerhouse's moves are indicative of developing trends and opportunities. They do the research for you.?

The trend now??In-person collaboration.??

Goldman Sachs isn’t alone in the movement to bring back corporate environments. Apple made news with a new plan to require its employees to return to the office a minimum of three days a week.??

Apple’s CEO Tim Cook explained the decision,?

“We are excited to move forward and believe that this revised framework will enhance our ability to work flexibly while preserving the in-person collaboration that is so essential to our culture.”

It’s not just businesses seeing the value of in-person collaboration. Among employees, there is a shared understanding of the benefits, including?mentorship, spontaneous brainstorming, and building social relationships.?In fact, of those who want to return to the office (at least part-time),?52%?report wishing to do so because of the socialization with coworkers.??

Corporate Leasing Demand Grows?

Demand has returned to Manhattan office space, reflected by the first uptick in rent prices for the last two years.??

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