This article is sponsored by Real Strategy Advisors.
The experiment is starting! After a busy summer of leasing, there’s the expectation in Ottawa’s marketplace that people will be heading back into work — that is, if they haven’t already. Many people have been eager to shake up their surroundings after a long stint of working from home and can’t wait to see and work alongside their colleagues in person. Some wonder if they’ll ever go back to the office commute and don’t know how they did it for so long. Others find themselves somewhere in the middle.
Two things are clear. First, offices aren’t going anywhere anytime soon. Second, there will be new practices and models (primarily hybrid) as workplaces figure out the best way to accommodate the future of work. Confidence towards a larger scale return to the office is being undermined by fear of the Delta Variant fuelling a fourth wave, especially among those who are unvaccinated. While it does seem like there is widespread plans to reoccupy office space, there is also a lot of discrepancy as to how many days employees will be expected to be there in person.
There are also questions around the extent people should get to choose how often (and under what circumstances) they can work from home or at the office. These discussions have many dimensions but in terms of the actual offices, many tenants have been taking advantage of historically low rental rates and leaving their older office space for newer, renovated, and more modern ones. As a result, the space left behind will require significant refurbishment and capital upgrades in order to still be competitive.
Many in the commercial real estate sphere are expecting things to be back to normal by the end of 2022, but at Real Strategy we believe that prediction may be overly optimistic and definitely premature. With no clear direction from the federal government on the public service’s long term needs for office space, there is potential for significant market volatility in the National Capital Region if the feds start vacating large swaths of surplus office space. There have already been early signs of government downsizing occurring with the vacating of buildings on Merivale Road, in Bells Corners, as well as in the Ottawa Business Park on St. Laurent Blvd. The decision to abandon these smaller, stand-alone buildings, which don’t form part of any large campus, could signal a much larger footprint reduction by the public service to come.
For these reasons, this issue will be focusing on the potential impact of the unknown. What will the future of office work look like for federal employees in Ottawa/Gâtineau and what might the influence be on the commercial real estate sector? With so many offices undergoing transitions to hybrid and co-working models along with renovations for the current circumstances... how long will it be before the status quo changes (forcibly or otherwise)?
We’re also joined by Richard Newbury of Creative Friction for the latest entry in our Construction & Layout series. Richard discusses his firm’s experience amidst the uncertainty caused by the pandemic. As always, we’re pleased to bring you a quarterly market report on the state of Ottawa’s office market, alongside insightful articles that speak to the trends we’ve been noticing and are watching closely. Whether you’re integrating back into the physical office, trying to figure out how to manage at-home versus in-office schedules and workstations, or you have the wrong amount of square footage to meet your new needs, you deserve amazing space and we’re here to help navigate the rest!
Darren Fleming has been an industry leader in the commercial real estate sector for over 20 years providing expertise in the areas of workplace strategy and commercial real estate brokerage. Darren has worked with some of Ottawa!s most active commercial design builders and major commercial real estate brokerages. With exceptional consulting and business strategy skills, he is an experienced leader and provides C-Suite level advice to his clients.