The calendar says September so Fall must have arrived. However a quick glance at our daily temperatures reminds us that we’ll have to be patient a bit longer for our hot weather to depart. Nonetheless the kids are back to school, UA football is underway, and while mindful of COVID, we’re all busily making plans for our ‘new normal’ routines. That certainly means that we’re heading back to our offices for our 9 to 5 weekday work, right? Well, not exactly. While we might wish for a clear answer, our return to the office continues to be a bit complicated and, well, confusing. Cushman & Wakefield recently published a study with fascinating insights which suggest that employees across industries want hybrid solutions. Of note, employees’ reasons for going to the office have shifted to be about socialization, collaboration, connection, and to achieve work-life balance. Called Five Fast Facts Return-To-Office here’s the C & W report’s key take-aways:
To ask a personal question - do you recognize yourself and your company in these assertions? If your answer is “yes,” what are you doing to move yourself, your company, and your employees forward in a positive and productive manner?
Amid this evolving return-to-office discussion, what type of office environment is preferred today? Once again there is the curious conversation about the benefits of the open floor plan versus the ‘private office and cubicle’ layout. The former is touted as beneficial to collaboration and communication, while the latter may be regarded as stodgy. However during the depths of COVID, the open floor plan was spurned by employees as hazardous to their health (which it certainly was), and work-from-home quickly became the preferred fashion. Employees’ memories are long, and their sluggish return to the open floor plan now may be influenced by the workplace upset which we all experienced. In a recent opinion piece in the New York Times, David Brooks took on this topic directly. Mr. Brooks wrote, “For decades, research has found that open plan offices are bad for companies, bad for workers, bad for health and bad for morale. And yet they just won’t die. Human beings, if they are to thrive, need a bit of privacy — walls and a door. And yet employers, decade after decade, neglect to give workers what they need, refuse to do what’s in their own self-interest.” Mr. Brooks opines that open floor plans provide managers with “…the illusion that they can see and control their employees, allegedly to maximize efficiency,” and concludes that there is continuing tension between management’s objective and employees’ real needs. From my personal experience as a commercial office leasing broker, I see this tension play out in my day-to-day work with company executives, employees, and landlords. As for the correct answer, the envelope please?
Finally as we’re all feeling better about our society’s physical health, we’re now flooded with concerns about our financial health. Annual inflation for the year ending August 2022 is 8.26%. At that rate, today’s prices will double in roughly 8.7 years. While I’m not encouraging you to mark your calendars for Spring 2031 to see how that contention plays out, that statement nonetheless should give us all pause. As University of Arizona Economist George Hammond noted in his report issued by the Economic and Business Research Center at the UA’s Eller College of Management in early September, economic growth in Tucson and across Arizona is expected to continue but to slow for the rest of 2022. In 2023; under a gloomier scenario, there’s almost an equal chance of a nationwide recession. In the latter circumstance, the report indicates that Arizona could see a significant slowdown in growth, with modest job losses in early 2023. Growth in personal income will lessen, population growth will be flat, new home construction permits will decrease, and retail sales will slow due to inflationary pressures and increasing interest rates. To note, our silver lining is that over the longer term, Arizona is projected to far outpace the national growth, with the Phoenix metro area leading the way, and Tucson growing at a slower pace.
In conclusion, having persevered through these past couple of years we have much for which we should be thankful. As we each move ahead with our ‘new normal’ routines we’ll be looking to the positive, while staying alert to cross-currents which may cause concerns. Amid your activities please feel free to be in touch whenever our brokers and commercial property management professionals at Cushman & Wakefield | PICOR can be of assistance.