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Takeaways
- Critical mass helps a workplace feel alive with activity and provides an excellent employee experience, but it can be difficult to reach with a hybrid workforce.
- Sharing office space and amenities with other companies through a hybrid lease can make critical mass easier to maintain while cutting long-term, fixed expenses.
- 51% of surveyed occupiers want their office leases to include access to shared building services, amenities, and flex spaces.
How much space do you need?
The number #1 question workplace leaders have to answer today is, “How much space do I need to create the office buzz employees want?”
At Density, we call this the Critical Mass, the ideal balance of space and human energy that creates buzz in the office.
Without critical mass, employees may walk into an office that’s too empty. That doesn’t make a good impression on employees, who are more likely to keep returning to an office that is alive with energy.
But the flexibility and unpredictability of hybrid work has made it challenging for companies to create this ideal balance between space and people. As a result, companies are questioning the value of hybrid work itself, with many pursuing a 2-3 day office mandate.
Indeed, in a 2023 CBRE survey of more than 200 corporate real estate execs, support for hybrid work dropped 15% from 2022. “The difficulty in space planning and creating critical mass in the office under a balanced hybrid strategy is likely behind this shift,” CBRE suggests.
Yet, there’s a big opportunity that we might leave unattended if we don’t try to design for hybrid work. To address this opportunity, occupiers are looking at their space needs.
51% of those same execs surveyed by CBRE say they want their office leases to include access to shared building services, amenities, and flex spaces, and 47% now consider shared meeting space an “integral building amenity.”
Common spaces as a must-have feature for tenants
CRE landlords are adapting to the changing needs of their tenants. They’ve opened a new path for companies to reach critical mass in the office by creating hybrid leases that include short-term options and shared spaces and amenities, such as conference rooms, outdoor areas, communal kitchens, and larger spaces for events.
This provides the flexibility companies need to accommodate the fluctuating space requirements of a hybrid workforce, while cutting costs and creating opportunities for more vibrant and valuable workplace experiences.
With multiple companies sharing spaces, there is less pressure on a single company to reach the critical mass needed for an office that feels alive.
With multiple companies sharing these spaces, there is less pressure on a single company to reach the critical mass needed for an office that feels alive. The mix of workforces generates a hive of energy that benefits each company by providing a strong sense of community, opportunities for networking and the cross-pollination of ideas, and high-quality design and amenities that they may not have the budget to provide in a traditional office space.
What does sharing space look like in practice?
Here is an example to help visualize this concept:
A high-end commercial property leases office space to two large companies — a marketing agency and a SaaS company. The building offers a variety of spaces, including:
- Formal and informal meeting areas
- Private offices
- Large areas for trainings and events
- Quiet workstations and touchdown spaces
- A gym with personal trainers and a variety of equipment
- A coffee shop designed for socializing and informal work
Each company leases a dedicated area or floor of the building for their day-to-day needs, and the shared spaces and amenities are bundled into the lease. Their dedicated space is smaller than a traditional private office because employees have access to spaces throughout the building and can choose the environment that works best for them, whether that’s a space buzzing with energy or a quiet, solo workstation.
As employees from different companies socialize, they form cross-company connections. These new relationships can provide fresh, external perspectives on all things business and identify opportunities to work together, such as the SaaS company hiring the marketing agency to promote a new product launch.
Each company benefits from the lower costs of shared spaces and eliminating long-term fixed expenses for short-term needs.
The shared office space allows the two companies to form a tight-knit community that provides valuable networking and collaboration opportunities that can lead to profitable innovations. It also serves as an effective retention and recruitment tool because it offers employees an active community and flexible, well-designed spaces that fit their needs perfectly.
In addition to an office with a lively atmosphere, cross-company networking, and collaboration opportunities, each company benefits from the lower costs of shared spaces and eliminating long-term fixed expenses for short-term needs.
Understand your space needs first
Before entering a shared space agreement, it’s essential to understand how your current space is used. Break down your office utilization by space type. How many square feet are dedicated to meeting rooms, quiet areas, and social spaces, and how often do employees use these areas?
Knowing these details will allow you to find a hybrid, shared-space lease with the right amount of dedicated square footage. For instance, if you find that the majority of your office utilization is for collaboration and socializing, you can downsize your dedicated space significantly since employees will have access to shared meeting rooms and social areas.
From challenge to opportunity
Yes hybrid work is harder to plan for and the 1-1 desk ratio model no longer aligns with the ways employees work today. But this new challenge can turn out to be an opportunity. Landlords have started to innovate on their offerings and design more common spaces in their buildings for all tenants to use. This new faction can help employers create a more vibrant atmosphere in the office while also spending more efficiency on real estate.
