Demand for office space still strong
Concern about pandemic might increase interest in medium-sized cities, mayor says
The pandemic is causing plenty of uncertainty and change to the way we work but is unlikely to spell the end of office culture in Kitchener-Waterloo, some experts say.
“It’s probably too early to fully understand” the full impact of the pandemic, said Cory Bluhm, executive director of economic development at the City of Kitchener. “I think remote work will certainly be more prevalent. The question is, what does that mean for offices?”
He believes there are three potential scenarios: First, some companies, like Shopify, may encourage all or most employees to work from home, which could lead to them needing less square footage than previously. Second, the recent trend of office hotelling may increase — where employees sometimes work from home, and don’t have an assigned desk space when they do come in the office. “So it may not change their footprint, it may just change the number of employees they bring to an office space on a given day,” Bluhm said.
“But we’ve also heard companies who’ve said they have concerns whether a remote office will hinder creativity and they may be less inclined to do virtual and may just have to look at different office scenarios,” to increase physical distancing.
That’s how Craig Beattie, CEO of Perimeter Development Corporation, sees it. His company has developed a number of Class-A office buildings in Waterloo Region, like the Google building and 345 King West in Kitchener.
While working from home has stepped up in recent weeks, he says, “ultimately, companies that really value engagement, branding and culture are going to continue to place high value on delivering a great office work environment for their team.”
Humans are ultimately social creatures, said Kitchener Mayor Berry Vrbanovic, and most of us benefit from
regular contact with our colleagues.
“We’re not machines,” Vrbanovic said. “We’re human beings. We interact and react to each other. We need that physical connection, at least some of the time.”
That’s what Beattie hears from many companies and seniors executives.
“People are genuinely looking forward to getting back to the office and tired of endless video calls,” he said.
“I think there was a bit of a novelty in the first six or eight weeks, but I’m sensing that people are missing the social and collaborative nature of a work environment.”
Even companies like Shopify that are pivoting to more remote work are still retaining some office hubs as central places for meetings and for gatherings.
Perimeter hasn’t seen any companies looking to cut back on their office space, Beattie said.
If anything, he thinks there may be more demand for top-flight office space with high-quality air filtration systems.
“I think the fundamentals still apply,” he said.
“If you put employees in a position where they feel diminished and disconnected, nothing good will come of it. Attracting and retaining talent is still the ultimate goal, and creating a great workplace is still a competitive advantage that beats cost cutting every time.”
Concern about the pandemic might actually increase demand for office space in medium-sized cities like Kitchener and Waterloo, Vrbanovic says.
“The Toronto investor market continues to be quite buoyed about our area,” he said. “One of the things that we’re going to need to grapple with is people are going to want to get out of the larger, more dense cities.”
That will force communities like Waterloo Region, where “there’s a certain amount of comfort and spread,” to think hard about how much density is right for this area, Vrbanovic said.
“This will generate a conversation for us, in terms of understanding what it the right density as we go forward. This is going to challenge all of us to really question what is that right space requirement that we need?”