Navigating the Future of Corporate Real Estate: A Pathway to Revival

THE COMMUTE AND MASS TRANSIT PG. 4

BUILDING VIBRANT CENTRAL BUSINESS DISTRICTS:

Navigating the Future of Corporate Real Estate: A Pathway to Revival Experience Matters.

The Power Of Collective Corporate Engagement

PG. 10

A BLUEPRINT FOR VIBRANT CBDS PG. 12

Navigating the Future of Corporate Real Estate: A Pathway to Revival

In the fast-paced world of corporate real estate, the winds of change are blowing stronger than ever. CRE across the globe is facing immense pressure, driven by under-occupancy, overvaluation, and the looming possibility that the $33 trillion global asset value could decline by a staggering 30%. To weather this storm, it is in the interests of investors, owners, financial institutions, and municipalities to entice workers back to physical office spaces.

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The Pressure on Corporate

The Looming Valuation Crisis

Real EstateCorporate real estate has traditionally been a cornerstone of economic growth and stability. However, the COVID-19 pandemic and the subsequent shift to remote work have dramatically reshaped the landscape. Businesses have downsized office spaces, adopted flexible working arrangements, andin some cases, even embraced a fully remote workforce. This has led to under-occupancy of office buildings and raised questions about the future valuation of these assets.

One of the most concerning aspects of the current corporate real estate landscape is the potential devaluation of this $33 trillion in global assets. With more companies adopting remote or hybrid work models, the demand for office spaces has decreased significantly. This oversupply of office space could result in a substantial decline in the overall valuation of corporate real estate assets. To combat this, stakeholders must explore innovative strategies to breathe new life into these spaces.

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The Commute and Mass Transit Even prior to the pandemic, the commute was always a big pain point for workers. With the average daily commute time in the United Sates of 55 minute per day, that stacks up to a staggering 229 hours a year, or over a 40-year career, 9,160 hours, or 381 days in a lifetime! Potentially much worse if you are in Los Angeles, New York, or London.

One promising avenue for revitalizing corporate real estate is the provision of free or subsidized mass transit. In an era where employees have grown accustomed to remote work, the ability to commute easily and affordably to a physical office becomes a powerful incentive. By investing in mass transit options, cities and corporations can make the prospect of returning to the office more appealing.

Luxembourg was the first country to offer free public transportation nationally in 2021, followed by Malta, but many cities around the world do the same - municipalities need to calculate the cost of subsidizing or free public transportation compared with the spend and taxation included with the added benefit of people coming to the physical workplace.

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Public transport tram in Luxembourg city - September 2021

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Source: WORKTECH23 San Francisco During a WORKTECH event in San Francisco, I was privileged to moderate a Think Tank session, “Magnetizing the Built Environment” joined by some amazing folks, we ideated some of the following key headlines:

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Better Together: Elevating the Sense of Community in the Built Environment.

Safety: is of paramount importance.

Mute the Commute: From free transportation to ride-shares, to shuttles.

Convenience is Key: Including things like Childcare.

People attract People: Energize the Experience.

Programming: Not just the building but the Community.

Re-hyper-localization: Supporting local organizations and businesses.

Connect with Community: From Non-profits to art festivals, and pop-ups.

Giving Back: Promote local businesses, offers, retail, restaurants.

Photo Credit: VisitLondon.com

Fuller’s Brewery, London The story of Fuller’s Brewery in London serves as a compelling case study. As profits rose by an impressive 19%, the brewery attributed much of its success to more people coming to work in the city and, interestingly, drinking more beer.

This demonstrates the symbiotic relationship between the corporate world and local businesses.

When employees return to the office, they not only benefit their companies but also stimulate the local economy, leading to increased consumer spending and overall economic growth.

Moreover, it’s crucial to recognize that this is not just about individual companies but entire central business districts (CBDs). Through a “Better Together” approach, we can collectively work to magnetize CBDs and avoid the negative impacts of this vacuum of workers during the week, which affects city economies, retail, restaurants, taxi rides, dry cleaners, and pubs!

While revitalizing corporate real estate is essential, it’s equally important to think about how we can elevate the sense of community in the built environment. Here are some innovative ideas to consider: Adaptive Reuse of Space: Convert floors into apartments or hotel space: Embracing mixed-use development can breathe new life into corporate buildings. Converting underutilized office floors into residential apartments or boutique hotels can create a vibrant, 24/7 environment.

Comprehensive Leisure Facilities: Beyond a gym, consider a leisure center: Elevate the office experience by offering a comprehensive leisure center with amenities like swimming pools, spas, and recreational areas. This not only promotes employee wellness but also creates a sense of community within the workplace.

Open Entertainment Spaces: Create entertainment spaces open to the community: Instead of limiting corporate facilities to business use only, open up entertainment spaces to the broader community. Hosting cultural events, performances, and exhibitions can foster a stronger connection between businesses and the people they serve.

Support for Non-Profits and Startups: Offer office and meeting space for non-profits and incubators: Dedicate a portion of corporate real estate for non-profit organizations and startup incubators.

This collaborative environment can fuel innovation and social impact while strengthening the local community.

Collaboration with Local Colleges and Universities: Partner with educational institutions to provide space for workshops, seminars, and collaborative research. This fosters knowledge exchange and builds bridges between academia and industry.

Community Co-working: If you do have latent, empty real estate, or capacity in your property portfolio, consider converting a portion into community co-working space. For property management firms or owners, this can become an important initiative not only to fill capacity but also to allow tenant workforces the opportunity to work from any of your properties – this could be an important added value when either retaining or attracting new tenants to your portfolio.

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Building Vibrant Central Business Districts:

The Power of Collective Corporate Engagement In the dynamic world of corporate real estate, a profound shift is underway—one that extends beyond office spaces and into the heart of our cities. As companies grapple with the challenges of low occupancy and the potential devaluation of their assets, they are increasingly recognizing the importance of collective action to magnetize central business districts (CBDs). Through innovative initiatives like TED Talk Mondays and Fiesta Fridays, companies are not only raising the level of inter-company collaboration but also becoming integral parts of their communities.

TED Talk Mondays: Fostering Intellectual Exchange

Fiesta Fridays: Cultivating a Sense of Celebration

One remarkable initiative gaining momentum is the concept of TED Talk Mondays. By hosting TED-style talks, companies within a CBD create a platform for knowledge sharing and intellectual exchange. These talks are not limited to in-house experts but can also feature guest speakers from various fields. Such events not only enrich the minds of employees but also draw professionals from other companies and the wider community.

Fiesta Fridays are another exciting development.

These events inject a sense of celebration into the workplace, making the office environment a more enjoyable and inclusive space. Companies can organize themed gatherings, cultural showcases, or simply provide a festive atmosphere where employees and their families can unwind. This not only boosts morale but also invites interaction among employees from different organizations.

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Open Access to Family Days: Bridging Generations

Charity Events and Social Impact Initiatives

In an effort to promote inclusivity and a sense of belonging, some companies are opening their doors to family days. These events not only welcome employees’ immediate families but also extend the invitation to parents and grandparents.

By bridging generational gaps, companies create a more diverse and interconnected community within the CBD.

Companies are also embracing their corporate social responsibility by organizing charity events and social impact initiatives. These endeavors address pressing local issues, from education and healthcare to environmental sustainability.

By working together, businesses can amplify their impact and drive positive change on a scale that no single company could achieve alone.

Community Engagement: Beyond Office Walls To truly become a part of the community, companies are expanding their horizons. They invite local communities to join them for special events, host charity drives, and contribute to local groups and social issues. This proactive involvement goes beyond a transactional relationship and transforms businesses into genuine stakeholders in the communities where they operate.

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A Blueprint for Vibrant CBDs In essence, the journey to revitalizing central business districts is not solely about individual businesses—it’s about a collective commitment to the well-being of these districts and their communities. By hosting events, fostering intellectual exchange, embracing cultural celebrations, and actively engaging with the local populace, companies are rewriting the script of corporate real estate.

This holistic approach creates a blueprint for vibrant CBDs where businesses thrive alongside the communities they inhabit. In this collaborative spirit, CBDs can evolve into hubs of innovation, culture, and social progress.

The concept of businesses as mere occupants of office space is being replaced by a vision where they are not just part of a community, but actively drive its growth and prosperity. As we navigate the ever-changing landscape of corporate real estate, let’s remember that it is not just about the buildings—it’s about the people and the communities building together.

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CHECKLIST FOR SUCCESS

Trying to navigate the future of your real estate portfolio, and plan your journey ahead, then consider this checklist for success:

Understand your occupants AND their workforces What they need What they want How often and where Design the Experience Program the Experience Resource the Experience Get feedback, measure Success.

There is no one hat fits all approach, the more tailored the more impact. Contact us to learn more. e: hello@4xiconsulting.com w: www.4xiconsulting.com

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Conclusion The future of corporate real estate is at a crossroads, with significant challenges and opportunities on the horizon. While the sector may be under pressure and facing the risk of devaluation, there is hope in the potential to revitalize these spaces by attracting workers back to the office. Offering free or subsidized mass transit is a strategic step towards achieving this goal, as it makes the physical office a more attractive destination for employees.

The Fuller’s Brewery success story underscores the far-reaching impact of reinvigorating corporate real estate. It is not just in the interests of investors, owners, financial institutions, and municipalities; it is a collective effort that can benefit entire communities. As we navigate the evolving landscape of corporate real estate, the importance of creative solutions, such as mass transit incentives, cannot be overstated.

By working together to rekindle the allure of the office, we can usher in a new era of growth and prosperity for all stakeholders.

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About the Author: Simon Elliot

Managing Partner & Co-Founder

Simon is passionate about human experience and how that is so important to business success whether employees, clients, or consumers. He believes in the power of human potential and how through thoughtfulness we can change the path to a brighter and better future for all.

As Managing Partner at boutique advisory firm 4xi, Simon advises both service providers and client organizations how to optimize the human experience for people at work, in education, at rest, and at leisure.

Based between San Francisco and Santiago, Simon is the Chair for WORKTECH Academy North America and a Fellow of the Institute of Directors.

4xi Global Consulting & Solutions 4xi is a boutique advisory and consulting firm focused on the Human Experience (HX) in the Away from Home markets – people at work, in education, at rest, and at leisure. 4xi is a unique collective of senior industry leaders from both the client-side and operator-side of the business supporting Client Organizations, Service Providers, Innovators, and Accelerators transforming their experience offering and making a greater impact through a people-first approach to service and business.

PUBLISHER 4xi Global Consulting EXECUTIVE TEAM Simon Elliot Managing Partner & Co-Founder Barbara Boden Managing Partner & Co-Founder Tony Johnson Leadership Advisory Council Chief Experience Officer (CXO) MARKETING Dina O’Reilly Strategic Partnerships & Project Management Office Hannah Spearman Graphic Design & Creative Services This publication was published by 4xi Consulting. For more information about 4xi Consulting, please visit us at www.4xiconsulting.com, email us at hello@4xiconsulting.com.

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