Foresight 2021 - 2nd Edition

FORESIGHT 2021 COLUMBUS OFFICE TENANT REPORT 2nd edition: Presented by Colliers | Columbus

tenant behavior affecting the office market

- p. 6

Where are businesses relocating?

- p. 14

top workplace trends

- p. 20

what can we expect in 2021?

- p. 24

PL US market expert insights: ”Providing staff with some level of flexibility to work from home, their favorite coffee shop or their co-working space near their home will become a recruiting tool.” p. 10

tenant insights: ”With the pressure to work longer hours, we’ve been hearing the expression, ‘instead of working from home, it’s now living at work.’” p. 22

OUR PURPOSE At Colliers | Columbus, we help to accelerate our clients’ success, specializing in industrial, office, retail, multifamily and investment properties. Services provided within these specialties include project leasing, disposition, tenant and buyer representation, corporate services, property management, construction management, development, valuation and consultation, in order to add value to our clients’ assets.

WHAT’S INSIDE? The U.S. and the world at large are facing a tremendous challenge, the scale of which is unprecedented in recent history. The spread of COVID-19 has significantly altered day-to-day life, impacted society, the economy and, by extension, commercial real estate. In recent months, the Columbus office market has felt the effects of the ongoing pandemic, recording negative absorption and increased vacancy due to an influx of sublease space that has come on the market. There is a lot of uncertainty regarding the future of office space. This report will explore workplace trends, case studies, migration patterns, tenant interviews and 2021 predictions – all relating to the Columbus office market.

2021

prediction

Look for this icon throughout for insight on 2021 predictions.

p. 6

p. 10

p. 14

Tenant Behavior

Interview

Tenant Migration

Tenant behavior trends that are affecting the office sector

With the Market Experts, Dan Dunsmoor and Michelle Fude from Colliers | Columbus

Analysis of trends and predictions for future tenant behavior

p. 20

p. 22

p. 24

Workplace Trends

Tenant Insights

What’s to Come?

Workplace trends to look for in 2021 as the world continues battling COVID-19 and begins the return to the office

Interview with Bruce Railton from Unispace

What can we expect moving forward in 2021?

p. 10

p. 22

about the authors Reach out to our research team with any questions, or for the inside scoop!

Hannah Williams: +1 614 410 5179 or hannah.williams@colliers.com

Hannah Williams CPRC Senior Research Coordinator A native of Columbus, Hannah grew up in Clintonville before attending Ohio State. As an ambassador for all things Columbus, she is passionate about being part of the city’s growth and development. Hannah provides research support for the Brokerage, Property Management, Facility Services and Construction teams, as well as the Director of Marketing & Research at Colliers | Columbus.

Briana Sfero CPMC Senior Marketing Specialist Briana is a graduate of The Ohio State University with a passion for communicating the Columbus story with a fresh take that truly spotlights her adopted hometown. She currently provides support for the Investment Services Group, as well as the Director of Marketing & Research at Colliers | Columbus.

Erin Pawlak Research Intern Originally from Chicago, Erin currently attends The Ohio State University where she majors in Marketing and minors in Real Estate. She works with Colliers in the Research department, providing support for, and working on, special projects with the Senior Research Coordinator.

Paul Krimm CSM MBA Managing Director | Principal With more than 20 years in the industry, Paul serves as the Managing Director for the Columbus operation of Colliers International, where he is responsible for driving recruitment, new business development, spearheading operational success and efficiencies and developing training and best practices across all service lines.

Richard B. Schuen CCIM SIOR CEO | Principal Rich Schuen, Colliers | Columbus founder and CEO, came to Columbus, Ohio over 30 years ago with a dream and a passion for real estate. Turning what he loves into his livelihood truly allows him to ‘live the dream’ and share it with his team members and clients.

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2021 TENANT REPORT

“

“

Columbus benefits from a relatively stable and diversified economy. In addition, the market continues to provide many amenities and advantages that make Central Ohio an attractive environment for firms to establish offices.

- Paul Krimm Managing Director, Colliers | Columbus

“

We may reconfigure the space… where people will touch down and get information and socialize rather than it being a traditional work environmentmore learning and development.

“

- Ralph Andretta CEO, Alliance Data Columbus Business First

TENANT BEHAVIOR & CASE STUDIES

6 2021 TENANT REPORT

The Trend: Rising Sublease Space The rise of sublease space entering the Columbus market is a hot topic that is majorly affecting the office sector. Since the COVID-19 pandemic hit the U.S. in March 2020 and forced office employees to work from home, the future of traditional office space has been questioned. This uncertainty, coupled with many employees continuing to work remotely, has caused many companies to sublease their workspaces. Columbus has experienced this firsthand, as more than 800,000 square feet of sublease availability has come on the market in 2020. Below are a few examples of companies that subleased their office spaces this year.

Case Study #1

Alliance Data Alliance Data officially moved their headquarters from Plano, Texas to Columbus in June 2019. The company’s new CEO, Ralph Andretta, established a focus on cost savings and efficiency. Within weeks of COVID-19 hitting the U.S. in March, Alliance Data moved 600 employees from their call center at 220 W. Schrock Road to their offices at Easton.

Throughout the rest of the year, the company subleased two additional locations – their Easton offices at 3075 Loyalty Circle and call center at 4590 E. Broad St. According to an article from Columbus Business First, most of Alliance Data’s employees are working remotely until at least May 2021. Andretta shared that some employees will shift to be fully remote, but he intends to continue utilizing the Easton complex as a learning and development space.

ADDRESS

3075 Loyalty Circle, 220 W. Schrock Road, 4590 E. Broad Street

TOTAL SUBLEASE SF 475,000 SF

CURRENT # OF EMPLOYEES 3,000 in Central Ohio.

Case Study #2

Ascena Retail In July 2020, Ascena Retail, the parent company of brands such as Justice, Lane Bryant, Loft, Ann Taylor and Lou & Grey, announced their Chapter 11 bankruptcy. An article from Columbus Business First discloses that, thus far, they have laid off a total of 450 employees at the Justice, Lane Bryant and Catherines headquarters across Central Ohio and are planning to close as many as 1,300 stores permanently. In September, Ascena subleased their space at 3344 Morse Crossing with plans to consolidate all employees to their other offices at 8323 Walton Pkwy. With all of Ascena’s brands being sold to private investors in the fourth quarter, the company has not yet disclosed plans for the remaining office space in New Albany.

ADDRESS

3344 Morse Crossing

Sources: Columbus Business First, CoStar, Alliance Data, Ascena Retail

TOTAL SUBLEASE SF 135,000 SF

CURRENT # OF EMPLOYEES 1,050 in Central Ohio.

2021 TENANT REPORT

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The Trend: Industry by Industry The ongoing COVID-19 pandemic has had a variety of effects on different types of office users. Companies are grappling with many decisions regarding their space – if or when they’ll bring employees back to the office, how much office space they will need and whether they will allow more flexibility in remote working moving forward. Although every company is different, there are emerging trends with how various types of office users are finding their “new normal”. Below are a few examples of companies in distinct industries that have responded to COVID-19 in different ways.

Case Study #1

Olive One emerging trend is that many creative and technology-centric tenants are modifying their office space needs because these types of users have adapted to remote working pretty seamlessly. Olive, Columbus’ second “unicorn” valued at more than $1 billion, has occupied the iconic space at 3rd and Main streets since 2013 and were actively in the market pre-COVID looking for short term expansion space. Because they were easily able to adapt to remote working, they have not continued to search for additional space. With more employees working from home, they have found that their current space is sufficient for their needs at this time.

ADDRESS 99 E Main Street

SIZE 32,000 SF

CURRENT # OF EMPLOYEES 500 in Central Ohio.

Case Study #2

Hahn Loeser & Parks LLP

On the other hand, professional services users, such as law firms, tend to be structured differently and have more of an inherent need for office space. More often than not, these types of companies have employees that need to be in the office to do their job. Hahn Loeser & Parks LLP is a full-service law firm founded in 1920 with offices around the country.

Before the pandemic, they leased about 19,000 square feet at 65 E State St and were looking to expand. Despite uncertainty surrounding the office sector due to COVID-19, the company not only continued to occupy this space but also expanded by more than 22,000 square feet in the building due to the necessity of their physical space.

ADDRESS

65 E State Street

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2021 TENANT REPORT

SIZE

42,000 SF

CURRENT # OF EMPLOYEES 150 in Central Ohio.

Sources: Columbus Business First, CoStar, Olive, Hahn Loeser & Parks LLP

“

“

This is still the very beginning of the story of Olive. We have the resources to build a really important company that’s around for a long, long time and has the ability to truly change the healthcare market.

- Sean Lane CEO, Olive Columbus Business First

WHAT’S IN STORE FOR 2021?

Major Tenants in 2021

2021

prediction

At the time of this publication, there are over 21 tenants in the market requiring 25,000 square feet or more. Over half of these large users are finance, business services or technology companies, so we predict these industries to drive activity in the market.

Prominent tenants such as Spectrum, Veeam Software, Orchard Alliance, WillowTree, First Merchants and Northwestern Mutual are searching for space and are expected to make big moves this year.

Northwestern Mutual and First Merchants are both searching for around 30,000 square feet in the CBD and surrounding neighborhoods. Because they are also both focused on new Class A space, we foresee that multiple large leases will be signed in new developments near downtown this year. Veeam Software leases 63,000 square feet in the Polaris submarket but are currently in the market and weighing their options. As of now, the company appears focused on leasing in Polaris unless another opportunity arises in another submarket. Due to Veeam’s plan to expand to as much as 90,000 square feet, the Polaris submarket can most likely expect significant positive absorption in coming months.

2021 TENANT REPORT

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FROM THE MARKET EXPERTS

Dan Dunsmoor and Michelle Fude (pictured above) are a full-service leasing and sales team at Colliers | Columbus. They’ve been involved with over 800 transactions valued at over $1 billion, accounting for the lease and sale of over 5 million square feet of office space. Their specialization in the office market provides them with expertise on tenant behavior and trends.

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2021 TENANT REPORT

Compared to last year, are you noticing a shift where tenants are looking for space? Why do you think this is?

Are you noticing any changes in TI (tenant improvement) allowances from landlords due to slowed tenant activity?

MF: Historically, there have been several trends in the market that

DD: We are seeing many landlords come to the table with

remained in 2020. For example, Dublin is one of the more popular submarkets from a migration standpoint of pulling new tenants into the market and retaining current tenants in the market. Dublin and Easton are known for keeping companies in the area once they’ve moved there. This is due to a variety of things including abundance of amenities in the areas and accessibility to the rest of the city and where employees and management live. Another trend we’ve seen in the past, and continues throughout this year, is companies considering Downtown also considering the Grandview area. This is due to cost savings in parking and price per square foot, while still achieving the centralized location in the city and proximity to Downtown amenities. As companies continue to try to save costs, this trend will likely continue. The good news for Downtown is Grandview has less than a 4% vacancy rate which remains relatively steady quarter-over-quarter.

Are you noticing any emerging trends in lease size? Do you feel as though tenants are wanting more or less space now because of COVID? DD: Generally speaking, yes, we are seeing that many of the companies that are signing new leases right now are taking approximately 10% less space than they were planning to take earlier in their process. That said, the sample size is too small to really tell because so many of the companies that would have relocated or signed new leases signed short term extensions at their current location so that they could take additional time to understand their long-term needs.

MF: Since companies were forced to adapt working remotely due to the shutdown, there have certainly been companies that have decided they could operate in a smaller footprint and/or sublease their office space entirely. Year-over-year the amount of sublease space on the market has essentially doubled in square footage. At the end of Q3 2019 there was roughly 650,000 SF of sublease space on the market compared to the end of Q3 2020 at approximately 1.1 million square feet. This number is slightly skewed by big block users such as Alliance Data, but the amount of sublease space entering the market is an indication that people are looking to lease less square footage overall to save costs.

While that may be the majority, we’ve still seen several companies work through expansions and take on more square footage to accommodate room for social distancing and larger workstations to make their employees comfortable enough to physically come back into the office.

creative up front concession packages that either include additional tenant improvement allowance (TI), abated rent or an additional portion of the TI that may be used towards soft costs such as FF&E (Furniture, fixtures, and equipment). This is all in an effort to preserve building values by maintaining face rental rates while also getting more aggressive to secure new tenants in this environment.

Are you noticing any trends as far as term length? What types of users are signing shorter vs. longer term deals?

DD: The average lease term for new leases is down from just

over 70 months last year to 60 months this year. Again, this is working with a smaller sample set. It seems that professional service companies such as law firms, accounting firms, etc are more willing to enter into long term agreements right now.

We’ve seen law firms sign 10 and 15 year leases during the past several months and multiple other professional service groups sign seven and 10 year terms. Technology companies seem to be the groups that are less certain about their space needs because they can more easily adopt permanent work from home strategies.

MF: We’re seeing more companies in the market requesting

three-year lease terms or shorter while they work to figure out what square footage they may ultimately need in the long run for their company. This seems to be more dependent on the type of company. For example, tech and creative companies that have significant sales force, tremendous growth plans and people on the phones that may have previously been packed into the space, those companies seem to be requesting shorter term leases to give the flexibility to grow again once their market stabilizes. Law firms, accounting firms and more traditional office users seem to have a steadier growth model and understanding on how they use their space allowing them to commit to a longer lease term.

continued on page 12

2021 TENANT REPORT

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FROM THE MARKET EXPERTS FROM THE MARKET EXPERTS cont.

From your experience, how has COVID affected different industries as it relates to tenant demand and behavior?

DD: I truly don’t think that there is a general answer. 2021 is going to be a year where most companies learn as they go

to determine what their new normal looks like moving forward. It will be a year of discovery and how companies use space moving forward will be specific to each company’s culture and operations. We will talk to two companies in the same exact industry and get two completely different philosophies. Many companies feel that not being in the office has a major impact on their ability to instill the company’s culture and values as well as limits the ability to inspire their people to reach their full potential. Others believe that they can work completely remote and not miss a beat. I personally believe that the physical office is a necessity.

MF: Because of their pre-existing systems and high number of millennial workforce, creative and technology-based

industries have easily transitioned to remote work. Therefore, the transition overnight to work from home with the shutdown was a smoother transition and some have found they can continue to operate at full capacity. One trend that has emerged is that those companies that have had an easier transition to working remotely seem to be putting off a decision for physical office space as they don’t know if and when they will need it, how many of those employees will continue to work remotely and what square footage they will ultimately need to occupy. Alternatively, the professional services industries tend to have decision makers and employees that physically need to be in the office and are figuring out ways to work with the social distancing guidelines to get their people back in their space.

2021

prediction

What do you think the future of coworking looks like?

MF: Over the next 12-24 months, as the market stabilizes, there could be an upcoming spike in the demand for co-

working space. Companies that have chosen to downsize or forgo their office space altogether may find they need to be in physical space again with their employees and have extensive growth needs to accommodate in a quick timeline.

Therefore, coworking may be a good short-term solution. Also, there may be employees that used to work in the office that now work remotely that may miss the natural in-person interactions and want an alternative work space from their homes.

2021

prediction

What tenant-related trends do you think will continue throughout 2021?

DD: One key trend is that I believe that a component of WFH is here to stay because there is no question that many employees enjoy the flexibility of working from home from time to time. Providing staff with some level of flexibility to work from home, their favorite coffee shop or their co-working space near their home will become a recruiting tool. Even having the ability to work from home one or two days per week will likely become a deciding factor in choosing where people want to work.

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2021 TENANT REPORT

TENANT MIGRATION Where are Businesses Relocating?

Tenants are consistently relocating their office space to better fit their needs. By using a points system based on signed square feet, we are able to track where office users are coming and going throughout the city. We also analyzed each of these transactions in detail to compile statistics, identify trends and make predictions for future tenant behavior. Keep reading to find out more information on tenant migration in the Columbus office market.

2019 Leases Signed - 37 Signed SF - 357,000 SF Average TI - $17.35 Average Term - 71 months

2019 Total: Leases Signed - 181 Signed SF - 2,057,872 SF Average TI - $22.74 Average Term - 70 months

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2021 TENANT REPORT

2020 Total: Leases Signed - 162 Signed SF - 1,177,245 SF Average TI - $22.86 Average Term - 61 months

Highest Average Term Length (in months) by Submarket: 82

83

92

months

months

months

Easton

There was a dip in Q2-Q3 2020 in the number of leases and square feet signed, but activity picked back up in Q4. There was no real trend in TI allowance per quarter, but average term length did slightly decrease over the year.

Law remained in top 3, non-profit and logistics replaced government and education from 2019

Polaris

Q4

Leases Signed - 43 Signed SF - 438,373 SF Average TI - $20.15 Average Term - 59 months

82

months

Non-profit

Q3

Leases Signed - 21 Signed SF - 90,791 SF Average TI - $25.69 Average Term - 56 months

77

months

Arlington/ Grandview

Leases Signed - 47 Signed SF - 653,000 SF Average TI - $20.53 Average Term - 73 months

Q2

Leases Signed - 20 Signed SF - 103,415 SF Average TI - $30.07 Average Term - 63 months

76

months

Law

Leases Signed - 55 Signed SF - 631,000 SF Average TI - $20.13 Average Term - 76 months

Q1

Leases Signed - 78 Signed SF - 544,666 SF Average TI - $20.93 Average Term - 63 months

Highest Average Term Length (in months) by Industry:

Logistics

Leases Signed - 42 Signed SF - 440,000 SF Average TI - $11.63 Average Term - 61 months

2020

Lease Length:

Arlington/Grandview remained in top 3, Easton and Polaris replaced CBD and New Albany from 2019

The number of leases signed did not decrease much, but square feet signed is about half of what it was in 2019. Average TI allowances have not changed postCOVID, but term length has seen a decrease.

TI Allowance*: Highest Average TI Allowance by Industry:

Law

$29.58

Healthcare

$26.93

Business Services

$26.51

Law remained in top 3, Healthcare and Business Services replaced Technology and Engineering from 2019

Highest Average TI Allowance by Submarket:

Polaris

$32.99

Easton

$30.25

CBD

$29.18

Polaris and CBD remained in top 3, Easton replaced Arlington/Grandview 2019 * The TI (tenant improvement) allowance is the amount that the landlord will spend for the tenant to build out their space.

Leased Square Feet: Highest Total SF Signed by Industry:

Financial Services 199,911 SF

Technology 158,806 SF

Business Services 135,305 SF

Financial services remained in top 3, technology and business services replaced healthcare and insurance from 2019

Highest Total SF Signed by Submarket:

Easton Dublin

CBD

New Albany

205,850 SF

190,501 SF

173,164 SF

Dublin and CBD remained in top 3, New Albany replaced Easton from 2019

TENANT MIGRATION HEAT MAP Represents the number of tenants that were new to the submarket

Dublin | 26 points 18 tenants (135,299 SF) 13 tenants (70,551 SF) 2 tenants (15,249 SF)

Polaris | 10 points 8 tenants (48,316 SF) 6 tenants (59,212 SF) 3 tenants (10,467 SF)

Gahanna/Airport | 7 points 10 tenants (35,891 SF) 2 tenants (12,551 SF) 3 tenants (21,726 SF)

Southwest | 2 points 1 tenant (11,750 SF) 3 tenants (9,710 SF) 1 tenant (3,480 SF)

Powell | -4 points 0 tenants (0 SF) 0 tenants (0 SF) 2 tenants (13,636 SF)

Represents the number of tenants that moved within the submarket

New Albany | 11 points 4 tenants (161,665 SF) 1 tenant (28,836 SF) 0 tenants (0 SF)

Easton | 9 points 4 tenants (71,966 SF) 2 tenants (73,597 SF) 2 tenants (4,394 SF)

Hilliard | 6 points 4 tenants (18,522 SF) 1 tenant (10,617 SF) 0 tenants (0 SF)

East | 1 point 3 tenants (8,531 SF) 0 tenants (0 SF) 1 tenant (6,376 SF)

Westerville | -5 points 5 tenants (17,393 SF) 5 tenants (16,947 SF) 5 tenants (51,905 SF)

North Central | -6 points 3 tenants (22,551 SF) 1 tenant (1,500 SF) 6 tenants (71,568 SF)

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2021 TENANT REPORT

Represents the number of tenants that left the submarket

Worthington | 11 points 17 tenants (60,376 SF) 13 tenants (47,294 SF) 7 tenants (36,308 SF)

CBD | 9 points 11 tenants (90,790 SF) 14 tenants (75,998 SF) 7 tenants (39,488 SF)

Arlington/Grandview | 4 points 5 tenants (20,447 SF) 2 tenants (16,655 SF) 3 tenants (6,842 SF)

North Delaware | -1 point 1 tenant (1,280 SF) 1 tenant (25,000 SF) 2 tenants (6,866 SF)

Southeast | -5 points 1 tenant (12,000 SF) 2 tenants (5,624 SF) 3 tenants (61,176 SF)

North Delaware

Powell Polaris

Worthington

Dublin

Westerville New Albany Arlington/ Grandview

North Central

Easton

Hilliard

Gahanna/ Airport

CBD

East

Southwest Southeast

Migration Key

5 points 4 points 3 points 2 points 1 point -1 point -2 points -3 points -4 points -5 points

Red represents movement to the submarket, while blue represents movement from the submarket.

-

+

50,000 SF and up ..............................

20,000 SF to 49,999 SF......................

10,000 SF to 19,999 SF.......................

5,000 SF to 9,999 SF..........................

0 SF to 4,999 SF.................................

0 SF to -4,999 SF................................

-5,000 SF to -9,999 SF.......................

-10,000 SF to -19,999 SF....................

-20,000 SF to -49,999 SF...................

-50,000 SF and below ........................

Arrows represent trending tenant movement Represents the hottest submarket of 2020 2021 TENANT REPORT

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DEEP DIVE: TENANT MIGRATION TRENDS From 2020 Of the 15 tenants that left space

13

in Dublin, of them leased space elsewhere in Dublin

100%

1/3

of the tenants that leased space in Gahanna/Airport were from outside the Columbus market

of tenants that left the Polaris submarket leased space in the Worthington submarket

Of new leases with the highest lease terms (10+ years),

2/3 of these tenants signed in Dublin and Polaris

The most popular submarket for technology tenants was Worthington The only two submarkets that had 0 tenants leave the submarket were New Albany and Hilliard

3/5

Of new leases with the highest lease terms (10+ years), 1/3 of these tenants were non-profits

of leases with the highest amount of free rent (5+ months) were signed by business services tenants

100%

of tenants that leased in the Southeast submarket are in the Healthcare industry

The average term length for leases 10,000 SF and up was nearly

7 years

2021

prediction

WHAT TO LOOK FOR IN 2021

Predictions in Tenant Behavior

TI Allowance:

Lease Term:

The average TI allowance for 2021 could reach $27 PSF.

Average lease term length for 2021 could drop to five years.

Over 25% of current tenants in the market are law, technology or business services companies – the three industry types with the highest average TI allowances.

Only 7% of current tenants in the market are looking in Arlington/Grandview, Easton or Polaris – the three submarkets with the highest average term lengths.

Leased SF:

Industry:

The office market will have a slower start than last year, but can anticipate accelerated activity in the latter half of 2021.

Business services, healthcare and technology companies will have a major effect on the office sector in 2021.

Due to the ongoing COVID-19 pandemic, the number of tenants in the market dropped from 117 in January 2020 to 98 in July 2020 and has been slowly gaining traction since.

These industry types account for over half of tenants currently in the market, and over 970,000 SF collectively.

With the number of tenants in the market reaching 128 in January 2021 and office users becoming more comfortable searching for space, we predict that by July, there will be around 150 tenants in the market, representing about 2.5 million SF.

Of the largest tenants in the market (looking for 20,000 SF or more), 48% of them are in these industries.

Migration Prediction 1:

There will be a shift in demand from the CBD to suburban markets in 2021.

Over the past 24 months, tenant demand for space specifically in Central/Downtown has decreased by

14%

Migration Prediction 2:

The largest leases of 2021 will occur in the CBD, East and Worthington submarkets.

10

tenants representing 373,000 total SF are searching in the CBD

2

tenants representing 130,000 total SF are searching in the East

1

tenant representing 50,000 total SF is searching in Worthington

2021 TENANT REPORT

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Workplace Trends in 2021 Regardless of where you work or who you work for, this past year has brought on many challenges due to COVID-19. Companies have been forced to acclimate to the circumstances that come with living through a pandemic and adjust their wants and needs when looking for office space. Despite the way that the remote work environment has taken over 2020, the office sector continues to look for ways to attract tenants. There are new designs being put into place to increase social distancing and ensure the health and safety of tenants. Below are some workplace trends to look for in 2021 as the world continues battling COVID-19 and begins the return to the office.

Flexible Work Schedules

Prioritizing Health and Safety

Potentially one of the most common office trends we have seen in the past year is remote work. With companies now using software such as Zoom, Microsoft Teams and Slack, employees are realizing that their jobs can be done from anywhere. And, while most employees are eager to return to the office, they still want to have the flexibility they got from working remotely. In 2021, we anticipate that companies will take more of a hybrid approach to the workplace, allowing for their employees to have a more flexible work schedule. For example, companies could split their workforce into “Team A” and “Team B”, alternating teams to come in on separate days. This not only allows employees a more flexible schedule, but also decreases the amount of people in the office at once.

Having worked remotely since March 2020, many employees are weary about returning to the office, fearful that they may be exposed to COVID-19. If companies want their workforce to return to the office, they are going to have to ensure a safe environment with clean facilities, open communication regarding COVID-19 related information and protocols that will reduce employee exposure and spread of the virus in the workplace. Companies will be forced to adhere to CDC guidelines and make the health and safety of their workforce their number one priority in 2021.

Technology Training Amid the COVID-19 pandemic, there has been a shift towards the use of digital technologies due to working from home. While remote work has its pros and cons, it is vital that the workforce understands how to use the technologies that help make it possible. We foresee companies offering technology training to all their employees as a major trend in 2021. Not all employees have the same experience and familiarity with the use of modern-day technology, and training will allow them to stay up-to-date with the digital platforms their company chooses to use. Through technology training, employees will have the ability to enhance their own personal development, as well as benefit the company as a whole.

Sources: Colliers Research, LinkedIn, Globe St, Benchmark One, Beekeeper, BerniePortal, Toolbox, Blue Spot Furniture 20 2021 TENANT REPORT

“

There has been ongoing discussions as to how companies will redesign their workspaces in order to ensure health and safety for their employees. One answer to this, and what we see as a major trend in 2021, is developing a more open space concept in offices.

In addition to allowing for social distancing in the workplace, an open space concept will give employees more of an opportunity to collaborate and communicate across all departments. Within the open space concept, we also anticipate the trend of moveable furniture. Being able to shift pieces of furniture around the office will allow employees to work collaboratively with others, all while being able to maintain a distance of six feet from one another.

Homelike Atmosphere and Leisure areas Many employees have enjoyed the perks of doing their jobs from the comfort of their own homes. In 2021, we predict that tenants will create a more homelike atmosphere, as well as leisure areas in their offices such as relaxed seating, game tables and wellness rooms. These amenities give employees an opportunity to take a break and decompress, which in turn will increase employee productivity and decease stress levels.

Single-seating furniture will be a key component within these relaxed seating areas in order to maintain social distancing. This type of atmosphere has the ability to bring a comfortable and inviting ambiance to the office that will make the transition back to the office more seamless for employees.

“

Open Concept and Moveable Furniture

The open office concept still reigns supreme and I don’t think anyone is ready to change that. Even more so now that hoteling is a hotter topic than it was pre-COVID. But we are seeing trends that lie in the details, such as the focus on furniture, fixtures, equipment and finishes that addresses the COVID pandemic.

-Gavin Jones Senior Project Manager, Colliers | Columbus

TENANT INSIGHTs Bruce Railton is a Senior Associate of Client Relations at Unispace, who works to revolutionize the creation of the workplace to meet the needs of today’s ever-changing global brands.

Can you give us a brief overview of what Unispace does and what your specific role looks like?

BR: Unispace is a global workplace firm with an integrated end-toend approach to strategy, design, and construction. Clients work with a single point of contact throughout the process which is where my role really comes into play. I’m involved from the very beginning of the project, from initial interactions, through project planning and delivery, to completion and post occupancy.

Because your organization focuses on the importance of your clients’ space design, how does the design of your office space play a role in how you do business?

BR: Our space is designed to support collaboration across our disciplines. That’s when the magic happens. When we’re able to easily and organically ideate, we can provide the best value to the client. Break out zones along with other space types provide areas for the different functions and roles of our team, which is so critical for us.

Bruce Railton

Senior Associate, Client Relations, Unispace

How has COVID impacted the way that you and your team communicate, collaborate and operate?

BR: Our team has done a fantastic job of adapting to new ways of working.

Initially it was a challenge connecting at the same level in a completely remote setting. However, given the global structure of our firm, our teams are fluid and often collaborating virtually on different projects nationally and globally, so we had the proper IT infrastructure in place already. Since the pandemic, we’ve been able to leverage different communication platforms like Microsoft Teams, Zoom, etc to connect, but we’re excited to be back together in person!

Have you noticed any changes in tenants’ requirements this year? we are sure COVID has accelerated a lot of already-changing trends.

BR: The pandemic has accelerated trends we were seeing already, like the push towards flexibility and remote working. As far as tenant changes, those who could delay their workplace projects did. We’ve seen a big shift towards short-term renewals as landlords have become more flexible. The current environment and the inevitable changes companies are going to have to make to their workplaces have caused the short-term approach to be a more attractive option. This has given us the opportunity to help them figure out what their new workplace strategy should be.

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2021 TENANT REPORT

Unispace office, unispace.com

Unispace office, unispace.com

Unispace has put out a few surveys this year related to COVID and the workplace. Can you talk a little bit about those and the key findings?

BR: Over the course of the pandemic, our strategy teams have pulled together research to understand how employees are working in this new environment. We found that remote working is here to stay. The majority of staff want to work from home up to three days per week. When you dig into the data a little more, what do staff really want? Flexibility.

Working from home was once largely frowned upon, but the last 10 months have told us people can be, and are, productive working remotely. However, we’ve found this is a band-aid solution. While businesses have survived and people are productive, they’re also working 20-30% longer hours. With the pressure to work longer hours, we’ve been hearing the expression, “instead of working from home, it’s now living at work.” To keep people productive, happy, and motivated, companies need a workplace strategy that balances home and in-office working. While working from home isn’t going anywhere, we need a strategy to manage it.

What about with physical spaces? we know the future of office space prediction is a hot topic. On more of a space trend level, what do you anticipate will happen?

2021

BR: With our research indicating staff will continue to work remotely 1-3 days per week, it means in most meetings, one team member will likely be remote. This impacts the ability to have unscheduled interactions and ideating sessions. Areas will need to be reconfigured to support hybrid working with the proper AV. Another challenge we see impacting office design is encouraging people to come back into the office. We need to be able to create an engaging experience for them so they want to come into the office. This has pushed us to re-evaulate space design to help employees do their best work. Before, space was designed for function; cubicles for focus work, café for socializing, meeting areas for collaboration. Now we’re seeing a shift towards outcomes-based design. For example, previously a private office would be designed for focus work. Now, would a worker better complete that focus work at home? An outcomes-oriented design layout opens up more space for collaboration, community building and socializing. Through our research we’ve found people miss camaraderie and teamwork, only an in-office experience can provide.

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Columbus can anticipate a slow but steady recovery in 2021 as the economy rebounds and the office sector adapts to a postCOVID-19 world.

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- Hannah Williams Senior Research Coordinator, Colliers | Columbus

WHAT’S TO COME?

2021

prediction

Despite tenants in the market dropping to 98 users in July 2020, the number of tenants searching for office space has grown to 128 users in January 2021. We foresee this demand to continue rising as companies become more comfortable entering the market for office space. Of the current tenants in the market, over half are in the business services, healthcare and technology industries. Additionally, of the tenants searching for 20,000 SF or more, 48% are in these industries. We foresee these types of users driving activity in 2021. Tenant demand for office space in the Downtown area has seen a 14% decrease over the past 24 months. Indicating a shift in demand, we predict that there will be more activity in suburban submarkets throughout the new year.

Due to the ongoing COVID-19 pandemic, offering more flexibility, implementing technology training and prioritizing health and safety will be upcoming workplace trends in the office sector. TI allowances are expected to rise while lease terms could decrease, on average. The Columbus market will most likely see a slower start than last year, but can anticipate accelerated activity in the latter half of 2021.

2021 TENANT REPORT

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F O RESIGHT

Contact our research team today: COLLIERS INTERNATIONAL GREATER COLUMBUS REGION Two Miranova Place | Suite 900 Columbus, OH 43215 +1 614 410 5179 @ColliersCbus