Employees will continue to demand urban workspaces for team collaboration, unique mix of amenities and effective services

Guest blog by, By Georgia Collins, EVP of Global Client Solutions, Hana

After a year where many companies have enacted remote work due to COVID-19, some have begun questioning whether location matters as much as it once did for office space.  

But while reports about corporate plans to leave high-density urban centers have made headlines, they have also clouded the truth. Companies are still actively investing in urban office space, and more are likely to follow suit after COVID-19. 

In a recent CBRE survey of 126 companies, fewer than 1 in 10 companies said they are “considering moving away from high density urban cores.”

The reason? Urban workspaces offer a unique mix of diversity and choice that will continue to attract talent pools — and offer a compelling reason for people to go back to the office.

Variety, vibrancy and choice make urban offices attractive

Since the start of the coronavirus pandemic, some have questioned whether office workers only lived in and around urban centers to be close to work. In doing so, they have pointed to data that underscores an urban exodus among white-collar workers.

These claims have been exaggerated. While there has been an outbound migration from cities during the coronavirus pandemic, the Pew Research Center found this migration accounted for just 3% of urban dwellers.   

And if you think people only live in places like New York City and San Francisco to be close to work, you’re entirely missing the point of living in places like New York City and San Francisco.

The draw behind urban centers isn’t mysterious: locations with higher densities of people living and working in proximity to one another offer more business opportunities, more services and more cultural and entertainment venues.

It’s exactly these ingredients that make urban offices — and their analogous live-work-play developments in the suburbs and mixed-use offices in smaller cities — appealing destinations for professionals. 

From restaurants to entertainment to wellness offerings, urban centers offer walkable environments with easy access to a unique mix of services and amenities before, during and after the workday, which have historically made them top choices for talent.

Large-scale real estate investments in high-density urban environments underscored this point before COVID-19.

And even now, surveys show demand among younger professionals to return to urban offices — in part due to the vibrancy and variety they offer.  

Why mixed-use, amenitized environments will attract talent back to the office

Before COVID-19, companies were actively competing with one another to attract talent. Their primary tools? Well-designed and provisioned work environments with compelling amenities and benefits in attractive locations.

Now, the more basic question is if people will want to return to the office after COVID-19.

They will. But when they do, it may well be for different reasons — and they’ll expect greater flexibility to move fluidly between the office, home and third places.

In a post-pandemic world, getting the office right will be more important than ever.

In conversations with Fortune-1000 companies and surveys amongst office workers, we see three ways driving people back to the office:

Connections with colleagues: In a COVID-19 survey of 1,000+ U.S. office workers, we found a large proportion of employees cite meaningful in-office connections, such as random interactions with colleagues, in-person meetings and in-person collaboration, as a key reason they wanted to go back to the office.

While we’ve made tremendous strides in the quality of virtual collaboration in the past 10 years, most employees have found that it is impossible for technology to effectively replicate the water-cooler conversations and spontaneous interactions that happen in the workplace.

It is these kinds of exchanges, not the formal meetings, that foster meaningful relationships and networks, produce “ah-ha” moments and build a sense of culture and affinity within organizations.

Many of these interactions take place over coffee, lunch or even an impromptu happy hour — and urban workspaces give employees countless avenues to connect with one another in and outside the office.

Change of scenery: In that same COVID-19 survey, we found a change of scenery was one of the top motivators for office workers to head back to the office.

While respondents said a lack of commute is a significant advantage to working from home, many also reported working from home had limitations.

After all, not all households have dedicated home offices from which to work and the presence of roommates, children and extended family members can lead to distraction.

For some, the lack of separation between work and home life also left something to be desired. Instead in an all-or-nothing proposition, the majority of respondents said they’d prefer a more flexible approach — choosing some days to be in the office and some days to stay at home, based on their schedule and the tasks to be tackled.

Office-specific services, spaces and tools: There are some spaces and services that just can’t be replicated at home, even for those with dedicated home offices.

Offices offer meeting and event spaces, visitor reception, brand immersion and specialized technology and equipment, to name a few.

For these reasons and others, employees will return to the office.

Commercial real estate decision makers, in turn, will continue to locate their primary workspaces in city centers – which will, undoubtedly remain the best catchment area for the largest talent pools across any given region.

After all, every hub-and-spoke model needs a hub.

Some companies are already making these decisions, investing in new office space in urban hubs.

Amazon announced plans to add 900,000 square feet of office space across San Diego, Denver, Phoenix, New York City, Detroit and Dallas — and is moving forward with its HQ2 campus in Arlington, Virginia, which could surpass 8 million square feet.

Facebook and Google have also announced plans to expand their footprints in New York City and other metro areas around the country.

But what about the suburbs?

While urban cores will continue to attract talent, the popularity of a complementary suburban strategy is also likely to grow, particularly in large metro areas where employees are highly dispersed.

For those employees who wish to optimize their commute on the days they “work from home,” but still get out of the house, “spoke” offices and the increasing viability of corporate-sponsored flex memberships offer a solution.

Ultimately, the defining principle of the new way of work will be choice. Employees will want to retain their ability to work flexibly on any given day and not necessarily on a fixed schedule. But they will also be eager to return to offices that are optimized for performance and connectivity.

Inevitably, many of these workspaces will continue to be in urban centers, because they will offer something that other locations can’t replicate: vibrancy of place, diversity of people, businesses and services, and connection to other individuals and organizations.

For commercial real-estate leaders, the key takeaway is clear: Companies will take a multi-faceted approach to location investments and fit-out decisions — and not a one-size-fits-all approach. But urban centers will continue to be central in their real estate strategies even as employees exercise more choice in deciding where and how they work.

A version of this article originally appeared on www.yourhana.com.