From the cavernous floors of the 1900s, to the fluorescent-lit cube farms of the 80’s & 90’s, to the posh settings of today, office amenities have taken a dramatic turn for the better, with more innovations to come. While these expensive additions don’t guarantee that a landlord will close a lease deal or that a tenant will be able to hire top talent or finally lure employees back to the office, new amenity packages are the key to competing in today’s uncertain office market.

More so than ever before, people ask me about “the office market”, how it’s doing and my thoughts on remote work. It’s obvious that some are just looking for a doomsday narrative but what they don’t realize is how complex of a question that is. I’m somewhere in the middle and I find that most people are in the same camp as I am…I don’t see remote work going away anytime soon and I don’t see a scenario where all employees are mandated to be in the office 5 days per week. People want the ability to make their own choice on when its best for them to be in the office and we also know that for someone just starting out or seeking a promotion, 100% remote is unrealistic. It’s a decision that varies person-to-person and that is why I think the hybrid model ultimately wins out.

In February 2023, Cushman & Wakefield published a report on office evolution and how to reposition assets for the future. The report notes that by 2030, U.S. office inventory will reach 5.7 billion square feet. Of that, 60% will require upgrades or repurposing to avoid obsolescence, while 25% will need to be reimagined entirely. This is a massive opportunity that extends far beyond individual buildings, it’s an opportunity to reimagine the entire urban core. The report also provided an updated utilization metric:

10% are in the office 5 days per week

15% are in 4 days per week

35% are in 3 days per week

18% are in 2 days per week

12% are in 1 day per week

10% are fully remote

In the aftermath of the pandemic, we have moved from “nice to have” to “must have” amenities. Employers are concerned that without the right amenities, they will not be able to draw people back to the office or hire the best talent. This has been the biggest shift. Everyone is a lot more aware of the kind of space they have and the type of space they are looking for.

Before I get into the latest amenities, I want to share some office amenity history. In the 1940s, Steelcase developed the very first office amenity—a metal trash bin! Say whaaa?!?! Why was this so important? Well, building and fire codes were not what they are today and everyone in offices smoked. It was not uncommon for someone to throw a partially lit cigarette into a wastebasket full of paper, causing the office and even the building to go up in flames. If you were lucky enough to have this amenity, the fire was contained to the wastebasket.

Amenities are important and extend far beyond a good cup of coffee and an interesting place to work. Amenities create social connections between workers, which is valuable for career growth and development, building affiliation and creating cohesion within organizations.

Major office space trends include privacy, ergonomic furniture, in-person mentoring, amenities tied to health & wellness, a “hospitality feel”, and smart building technology. When designing your office, must-haves include quiet & tech-free zones, individual workspaces, focus rooms, libraries, innovation hubs, maker spaces, project/war rooms, rest/nap areas, outdoor space & meditation spaces.

In the past, the office developer would construct the building and lease the space to a tenant who would in turn build out the space to their preferred specs. Often some tenant improvement dollars would be offered to sweeten the deal. Now, tenants want and need finished space with amenities in place. Developers were incorporating amenities such as conference centers, cafes, outdoor spaces, and gyms pre-pandemic and have now taken it ever further with amenities such as operable windows, terraces, golf rooms, libraries, yoga classes & wellness centers.

All of this comes at a cost, one that is usually borne by the tenant in one way or another. But, just as developers are evolving so are tenants. Flexible scheduling means fewer people in the office at any given time. Amenities such as conference centers and cafes mean these areas within the office can be utilized for some other purpose or eliminated entirely. All of this translates into smaller footprints for tenants. So, in theory, a tenant can downsize their office, upgrade their location & work environment, and still pay less in rent than they were pre-pandemic.

           Pre-pandemic:

Class B property, no amenities: 10,000 SF x $3.00/sf = $30,000 per month

           Post-pandemic:

Class A property, highly amenitized: 5,000 SF x $5.00/sf = $25,000 per month

In the span of less than a century, the office landscape has changed immensely, from the most basic amenities to spaces resembling luxury retreats. As the dynamics of work evolve, so does the emphasis on creating spaces that prioritize employee well-being, foster collaboration, and offer flexibility. The cost-efficiency and strategic positioning of these amenities-rich environments underscore their value. Ultimately, office spaces not only reflect changing work patterns but also our evolving understanding of what it means to create a productive, cohesive, and fulfilling work environment.

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