What Does It All Mean? Understanding the Latest Commercial Real Estate Jargon
The nature of the workplace has evolved rapidly in recent years. Even before the onset of the COVID-19 pandemic, many forward-thinking organizations were reassessing their relationship with the physical office and experimenting with new work models to best support their businesses and teams. The pandemic accelerated these shifts significantly, with many companies transitioning to fully remote work within a tight timeline.
As organizations plan for re-entry, many are updating their workplace strategies and layouts to align with their teams’ needs and preferences as well as newly established best practices. While some aspects of the workplace still resemble a traditional office, there are many new and creative workplace components that are growing in popularity in response to changes in worker preferences, workstyles, and technology. This shift has brought with it a slew of new terms and phrases that are defining the workplace of the future. If you’re scratching your head over some of the new jargon, we’re here to help.
Here is some of the most common language we’re seeing, what it means, and why it matters:
Indicates a mix of two parts. In business and real estate, this refers to schedules that involve working part time in the office and part time remote.
It’s hard to read a workplace article, watch a business segment, or find a LinkedIn post that doesn’t reference hybrid work these days. Many experts predict that a majority of professional organizations will shift to a hybrid model (if they haven’t already) in response to overwhelming demand from employees. While Gallup data shows that hybrid work supports worker wellness, this model also poses important questions around real estate strategy and office utilization.
Adaptable office equipment that allows employees to modify workspace configurations easily to support different needs and preferences – think tables and chairs on wheels, pieces of furniture that can be combined or converted, or screens that can break up a space or provide privacy when necessary.
Many organizations have been hesitant to renew or release real estate holdings as they wait to assess the impact of the pandemic on their business and workforce. To accommodate changes in their teams and workstyles in the meantime, they’ve introduced modular furniture to existing spaces. This is an inexpensive solution for short-term space concerns, and also provides an opportunity to pilot different space and furniture types.
Formally defined in the Merriam-Webster Dictionary as “an event or effect that cannot be reasonably anticipated or controlled”, the force majeure clause in a commercial lease temporarily excuses the Landlord and Tenant from performing certain duties and obligations due under the lease if an unforeseen circumstance, act of nature, etc. occurs beyond the parties’ control.
Rarely discussed pre-pandemic, the force majeure clause took center stage at the beginning of the COVID outbreak and remains a top-of-mind consideration in lease negotiations. During the onset of COVID, many tenants argued that they should not have to pay rent given force majeure. The impacts and effect of force majeure are still evident today more than two years later, where some landlords have pointed to the clause as protection against materials and labor shortages in construction and tenant fit out jobs.
A holistic understanding of how employees engage with their organizations, from career development opportunities and manager relationships to technological support and coworker culture.
Across industries, we’ve seen a renewed focus on the employee experience. Widespread remote work encouraged workers of all demographics to reevaluate their relationships with their jobs and employers, leading to mass resignations. Employers are doubling down on their technology features, wellness programs, benefits, and flexibility offerings in the hopes of retaining top talent. Smaller, less visible details such as easy room booking, sound masking, and a good sound system in the café can also go a long way in making employees’ lives easier. We expect that employee experience will remain a key factor in workplace and real estate decision making.
The increasingly common shorthand for ‘return to office.’
RTO has been a key focus for employers and a point of controversy and tension among workers. While many employees have come to enjoy the convenience of working remote, organizations are eyeing RTO dates for a number of reasons – financials, real estate, productivity, etc. Virus variants have thrown a wrench in many RTO plans, but as of early 2022, many organizations are rolling out structured (and largely hybrid) returns.
We suspect many of these terms will become long-term fixtures in our real estate vernacular, if they haven’t already. As post-pandemic trends and strategies continue to materialize and evolve, we will surely be introduced to another wave of new terms and concepts, and it’s our job as real estate advisors to help you understand new offerings and synthesize the information in a way that best serves your team. If you have questions or would like to discuss your real estate situation and strategy, Cresa’s advisors are here to help.
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