PwC have published their top real estate industry trends for 2024 report and here are some of the highlights when regarding the office sector:
Hybrid is here to stay – 30% of total workdays in the United States now involve remote work, as revealed by WFH Research, with 45.9% of workers adopting a hybrid approach (33.7% spending an average of 2.5 days per week in the office) or working fully remotely (12.1%) as of summer 2023.
Improving tech is key – Future offices should prioritize advanced technology, evolving efficient collaboration, providing well-defined spaces, enhancing experiential value, and incorporating designs that meet employee needs for increased productivity.
Tenant demands – Tenants now demand higher spending on improvements while occupying less space. Weak office absorption and rising vacancies persist, with a national vacancy rate in the high teens.
Long term success – Despite the negative outlook, the majority office buildings are performing well, where occupancy rates have either improved or stayed the same since 2020. The pandemic has spurred initiatives to redevelop obsolete office buildings where over 100 million square feet are under construction as of September 2023, according to CommercialEdge.