CEO addresses changing office occupancy patterns
Canada’s office real estate market is facing a new reality as companies balance the need for in-person collaboration with cost-cutting efforts, according to Dream Office REIT chairman and CEO Michael Cooper.
Cooper noted that while a significant portion of downtown employees are back in the office on peak days, the industry is still figuring out how to accommodate changing work habits and economic challenges.
“We’re now seeing almost 80% of the people that used to be downtown (working) downtown on peak days,” Cooper shared in an interview with BNN Bloomberg. “I think that’s what’s going to drive the use of office space, so I think that it’s not as big a factor as people may have thought before.”
This shift, he said, has made companies focus on peak office needs to ensure space is used effectively.
“Companies want their people in on the same days, they want people to work together for training and for collaboration, so that’s really what the driver is for office space,” Cooper added.
However, he noted that on non-peak days, many employees work from home, part of a hybrid arrangement now widely accepted by employers.
“I think prior to COVID-19, if you had kids, and a husband and wife worked, it was really hard to keep things together, so I think companies sort of accepted that people need more flexibility to have a proper work-life balance,” he said.
The demand for office space is now shaped as much by economic factors as by employee preferences. With rising operational costs, Cooper says many companies are trimming their real estate footprints.
“Companies are trying to reduce their overall costs,” he said, referencing both large-scale and more subtle layoffs. “[What] we’re seeing is companies trying to figure out how they can have [fewer] employees and how they can have less office space.
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“This is almost five years since we thought we knew what office buildings would be used for, we thought we knew how many would leave, how many come, and every year, we’re trying to figure out: ‘What’s the equilibrium now?’ Five years is a fairly long time.”
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