Wow, according to this report AI firms are looking for 2.5 million sf of office space in the San Francisco area and another 1.7 million sf in New York. Hopefully they will start considering Denver where we have much cheaper rents, lots of inventory, and good base of tech workers.

AI Firms Are Hunting for A Lot of Office Space

By David M. Levitt

Artificial intelligence. Will it become the space user that boosts an office market hungering for tenants?

The jury is still out on that question. But the initial indicators look good.

“In a market as challenged as San Francisco is, it is the one bright spot that is showing growth,” said Derek Daniels, regional director of research for brokerage Colliers (CIGI). His remit includes the San Francisco Bay Area, which encompasses San Francisco proper and Silicon Valley, where many of the innovations in computer and information technology get their start. “Companies are saying we are going to commit to more space than we had previously.”

In a rare bit of good news, the largest lease in the fourth quarter of 2023 in the San Francisco office market was OpenAI’s commitment to 486,600 square feet at 1455 and 1515 Third Street in the Mission Bay submarket, Daniels said.

And the second-largest was the AI startup Anthropic taking 230,315 square feet at 500 Howard Street in the city’s South Financial District. Anthropic describes itself on its website as a company that produces “AI research and products that put safety at the frontier.” As for OpenAI, it famously introduced content generator ChatGPT in November 2022. 

The large deals were indicative, Daniels said, of an AI industry that needs the traditional advantages of an office — a place where workers can gather, learn company culture, pass along tips and collaborate — to keep growing.

“No one can predict the future, but if investment continues to grow in the AI space, there’s no reason to believe that Wall Street won’t help it expand its markets just like other tech users have,” Daniels said. “The industry grew from Silicon Valley and expanded into other markets. The Bay Area is currently the home of AI, but there’s no reason to believe it won’t expand outside.”

There’s no shortage of disappointment in commercial real estate, especially in the office market. In its national fourth-quarter office report, Colliers said the office market “limped” into 2023, and barely improved as the year played out. Nationally, the vacancy rate at the end of 2023 was 16.9 percent, higher than the 16.3 percent peak during the Global Financial Crisis of 2008 to 2010.

The drum beat of companies requiring employees to return to the office continues as Dell tells all its employees, even those more than an hour away, that they have to work at an office at least 39 days a quarter (approximately 3 days per week) saying that it is necessary to “drive innovation and value differentiation.”

After Championing Remote Work, Dell Calls Employees Back to the Office

By Katie Burke

After years of encouraging remote work, Dell Technologies is joining a chorus of global tech giants in their push to get employees to return to physical offices.

The Round Rock, Texas-based company told some of its employees that they must show up to a corporate hub at least 39 days a quarter, a mandate that shakes out to roughly three days a week, a Dell spokesperson confirmed to CoStar News. The new in-person requirement will apply to workers who have been operating on a hybrid policy, which the computer hardware company has gradually revised over the past couple of years.

“We believe in-person connections paired with a flexible approach are critical to drive innovation and value differentiation,” the Dell spokesperson said in a statement.

The revised policy marks a sharp turn for Dell, which had previously said about two-thirds of its workforce could continue working from home until the pandemic ended, and even then would only be required to show up to an office for one or two days per week. Starting last year, however, the company began walking that leniency back with a previous mandate requiring all employees living within an hour of a Dell office to come in at least three days per week.

Now, that has been widened to include all employees, regardless of where they live or how long it will take for them to commute to a physical workspace.

The move underscores employers’ growing confidence in their ability to enforce stricter rules surrounding in-person requirements, a shift widely expected to help boost daily attendance rates at office properties that have been sitting largely vacant since the early days of the pandemic. The tech giant joins other companies such as IBM, Kroger, Amazon and AT&T in stepping up in-person requirements that go as far as asking workers to relocate in order to live closer to an office.

Dell, which employs more than 125,000 workers, occupies about 9.5 million square feet of office space around the world, according to CoStar data.

We all knew it, but now Yale scientists have proven that Zoom Calls are not as good as meeting in person!

The Brutal Truth of What Zoom Calls Do to Your Brain, According to New Yale Research

EXPERT OPINION BY JESSICA STILLMAN, CONTRIBUTOR, INC.COM
@ENTRYLEVELREBEL

We’re years into the pandemic-driven explosion in remote work and, while most of us have gotten used to having many more remote meetings, they still seem a little awkward.

There’s the uncertainty about where to look, the hesitant wave goodbye at the end, the fiddling around with settings at the beginning, the unpleasantness of constantly watching yourself, and that one colleague who has really odd taste in backgrounds.

All of which creates a subjective feeling for many that spending time on Zoom — while possibly still preferable to a daily commute — can be exhausting and somehow unsatisfying. Are we all just still getting used to meeting by video? Is it just a quirk of the tech? Or is something more fundamental going on within our brains that makes Zoom feel so awkward?

Wow, there is a lot to digest in this EY Future Workplace Index 2023 study! Here are my key takeaways. Number 1, companies are pushing their employees to come back to the office at least 2-3 days a week or more. And the majority still have assigned workstations or offices as opposed to unassigned reservation systems. So along with this, most companies aren’t downsizing, but rather investing in their space to make it more attractive and productive for their employees. What is your company doing?

Future workplace trends: Are you putting your office to work?

By EY

Rocked by three years of shifting workplace trends, corporate real estate is still finding stable ground.

In the continuing reboot of the American workplace, millions of employees in the US and worldwide have been pulled in different directions by swerving trends. Hybrid, fully remote, flexible schedules, four-day workweeks, required days in the office each week and full time in the office are among the models vying for standardization, acceptance and talent in the corporate workforce.

Fluctuating expectations have created a low but constant drumbeat of anxiety for mid-career professionals with children, aging parents and long commutes. Meanwhile, Gen Z, the next wave of the corporate workforce, naturally assumes a whole new level of agency and flexibility when it comes to work-life balance and preferred practices, even in their first or second jobs.

The third annual EY Future Workplace Index, a national research survey of C-suite corporate leaders conducted by Ernst & Young LLP (EY US), offers an eye-opening window into the ongoing evolution of the workplace and real estate during the past year. Perhaps most remarkable, is that the number of EY US survey respondents reporting nearly full-time remote work has plummeted from 34% in 2022 to 1% in 2023.

The move away from full-time remote work is welcome news for the corporate real estate sector, which is aiming for growth in both the demand for office space and its utilization. It’s worth noting that based on survey respondent feedback, over the past 24 months, smaller companies increased their office space, while larger organizations maintained or reduced their footprint but enhanced the quality of their space, technology and amenities. Optimization of space and time leads company leadership priorities.

Are Law Firms redesigning their office space for hybrid work? Per this article from Gensler, maybe.

Certainly, they are planning more meeting/gathering spaces with smaller more uniform offices, but are attorneys willing to give up or share their private offices? I think the jury is still out on this one.

What do you think?

Rethinking Law Firm Workplaces in the Age of Hybrid Work

By Carlos Posada

Editor’s note: This article originally appeared on Law.com.

Although the debate on what the right balance and approach are continues, it is fair to say that hybrid working is here to stay. Embracing this transition in law firms has required a lot of thought, given the nature of their highly confidential and focused work. We also know how crucial mentorship and firm culture are to the business and ecosystem of today’s law firms, so creating places that people want to work in is more important than ever. As we increasingly look at design and the built environment through the lens of sustainability and social consciousness, it seems competing interests are emerging that are creating tensions in the design of law firm workplaces.

One of the universal issues we face is the climate crisis. As we collectively consider how to reduce our carbon footprints, the decision to rethink the purpose, and therefore layout, of our offices has become urgent. It is important we explore the challenges and opportunities law firms face in finding the right balance between their sustainability goals, employee well-being, and business opportunities where employees can thrive and do their best work.

Currently, data is showing that European office occupancy is averaging 50% with midweek peaks of 65%. The feedback we have received from lawyers is that they often feel isolated in their assigned offices and question the benefit of commuting in when there is a lack of buzz, energy, and even interaction with their colleagues.

Even employees believe they need to be in the office 3 days a week to maximize productivity. Key findings from a study by Gensler of 14,000 office workers from 9 countries are:

• 61% of workers say they need to spend more time in the office to maximize productivity.
• The ideal target for maximized productivity was 63% of the workweek at the office.

This comes direct from the employees.

Hybrid Is Here to Stay. So Is the Office.

By Janet Pogue McLaurin, Anita Grabowska

Office buildings in many cities are sitting empty, with some cities reporting the highest vacancies ever recorded. At the same time, Kastle is measuring average occupancy at just under 50% across 10 key U.S. cities. Does this paint a picture of doom and gloom for the office? In Gensler’s latest workplace research of 14,000 office workers across 10 industries in nine countries, we found an optimistic future emerging: while hybrid work is here to stay, the office is needed more than ever. And we found a few other surprises as well.

Gensler has been measuring how people work, space effectiveness, and what employees value in a workplace experience since 2005. With our data, we can see what is changing over time as well as identify global commonalities and unique differences by country, by industry, and by key performance indicators such as innovation, commitment, and engagement. As employees were returning to the office in late summer and fall of 2022, we researched how and where people were working, why people were going to the office, what’s working/not, and what’s missing. In the process, we uncovered some interesting shifts in how people are working and their expectations for the workplace moving forward. This is the first of a blog series delving into some of the key findings. Check out the published report here.

According to a Gensler study, the number one answer when asked why employees come to the office was “to focus on my work.” I think most would have guessed to socialize and partake in the office amenities. Working from home must be distracting!

What employees want in a post-Covid office space

By Marq Burnett, Associate Editor, The Playbook

How to approach real estate in the post-Covid world will be a key question for employers to consider in 2023 — especially if economic conditions lead to cost-cutting measures.

But what do employees actually want in a post-Covid office space?

That question was a focal point of the Gensler Research Institute’s U.S. Workplace Survey 2022. Gensler is a global architecture, design and planning firm with more than 50 locations across the world.

One big takeaway? Employees want space where they can get work done, signaling a potential disconnect with managers who often focus on the office as a destination for collaboration.

When asked why they come to the office, “to focus on my work” was the most popular answer (48%), outdistancing many of the reasons often cited by managers or companies touting the need to return to the office.

Great advice for going after a goal with a plan and ALL In mentality versus wishing and wanting a dream! Have you “Crossed the Rubicon” toward your goals?

‘Grit’ Author Angela Duckworth Says 1 Word Separates People Who Give Up From People Who Get Back Up Again. The pioneering psychologist says those with exceptional grit all share one particular mindset.

BY JESSICA STILLMAN, CONTRIBUTOR, INC.COM

“In this world, nothing is certain except death and taxes,” Ben Franklin supposedly said. He probably should have added another item to his list–setbacks.

No matter how privileged, talented, and determined you are, in life you will face setbacks. People will tell you no. You’ll try and you’ll fail. You’ll have moments when you worry you don’t have what it takes. Given that failure is universal, why do some people get back up again while others give up?

There is probably no one better qualified to answer this question than Angela Duckworth. A University of Pennsylvania psychologist and blockbuster TED speaker, she also wrote the bible of perseverance, Grit. She recently took to the TED Ideas blog to explain what separates those who quit from those who stay the course. Her answer boils down to a single word.

No question the world is changing and office space now comes in all shapes and sizes! But I think Chris Erickson, a partner with Denver-based venture capital firm Range Ventures, is right on with his quote, “Even with all of the remote productivity tools available these days, I haven’t seen anything I think replaces the meeting in a conference room with a whiteboard. For companies in that growth stage, the benefit of colocating and solving hard problems together way outweighs the cost.”

Tech Companies Still Need Offices. But Here’s How Their Look and Location Are Changing.

By Katie Burke –  CoStar News

September 12, 2022

As the 2010s came to a close, tech workers would swarm around the Salesforce Tower in downtown San Francisco on weekday mornings, filling the nearby cafes, light rail stations and soaring office buildings stacked with companies eager to lease distinctive space.

More than three and a half years later, the weekday scene is far quieter, with many workers at home on any given workday. The pandemic spurred early-stage startups and international tech heavyweights to shift to remote, hybrid and flexible work models that led them to reduce, relocate or completely vacate office properties across the country.

Companies are still investing in physical space, but on a smaller, more dispersed scale. Customer service software maker Salesforce has taken a long-term lease at a ranch in a remote Silicon Valley mountain suburb, while search engine giant Google has adopted outdoor work campuses and “Team Pods.” Tech companies are entering a workplace transition that could have a lasting effect on some of the most prominent and expensive U.S. office markets.

“Companies are being smarter with their dollars,” said Samantha Martz, a JLL executive vice president and leader of its High-Growth Technology group in San Francisco. “They were leasing a ton of space in the days before the pandemic, but now the approach is to lease a smaller amount that can be used extremely purposefully in order to let teams be more productive and to have those in-person moments be valuable. Yes, maybe it isn’t five days a week, but when workers do come in, that time is very important and impactful.”

It is clear that the hybrid work from home results and future are unclear! Just read the recent Denver Business Journal article on the topic and your head will be spinning. But common sense tells me that if you cannot do your job better by going to the office, why should you. And I think certain jobs and situations require more collaboration/office time than others.

Likewise, I believe certain people may need more time in the office than others to be effective and happy with their job. Each company will have to evaluate what works best for their situation. In the end, the office does have to be a place that employees want to go and that enhances their productivity.

The return to office is losing steam. Here’s how to make your office a magnet.

By Andy Medici  –  Senior Reporter, The Playbook,

Aug 17, 2022

The much-vaunted return-to-the-office has plateaued — and many workers remain uninterested in coming back full time.

According to the latest data from Work from Home Research, released in late July in collaboration with Stanford University and the University of Chicago, the percentage of paid full days worked from home has stabilized at just over 30% of an average week. Among workers who had previously worked at least some amount of time from home during the pandemic, that share of days worked from home has stabilized at just under 50%.

Roughly 15% of workers are fully remote, compared to about 52% who are full-time onsite and about 33% who are hybrid, although the hybrid percentage continues to increase as the disconnect over remote work appears to be narrowing.