OFFICE MARKET REPORT | 4th QUARTER 2021
Trends
Recovery in the works
At the beginning of the fourth quarter, as the Delta variant seemed to be under control thanks to mass vaccination, companies had started to implement their plans to bring workers back to the office.
A gradual return to work, mostly in hybrid form, was in clear view for the first months of 2022. The rapid spread of the new Omicron variant, however, took everyone by surprise, forcing governments and businesses to back down. The Covid era is not over yet, and in the meantime, life goes on, two steps forward, one step back. As hard as this step back may be, there is a sense that the variant has only postponed the recovery by a few months and that a return to normalcy is within reach.
We are not there yet, however, as illustrated by Avison Young’s Vitality Index. Based on cutting-edge technology using anonymized geo-tracking data emitted by cell phones, Avison Young’s Vitality Index tracks the daily volume of foot traffic for selected locations in 23 major cities across North America. By tracing the evolution in real-time of foot traffic in the various office hubs since in March 2020’s lockdown, the Index shows that Canadian cities where very strict health measures were imposed after the holidays to limit the spread of Omicron were the most impacted in terms of foot traffic declines.
In Montréal, the Index also shows a significant increase in visitors in mid-September, followed by a steady increase, week after week, up until mid-December. This indicates that the next lifting of restrictions should also have a direct positive impact on visitor volume, since people who are tired of remote work will, in theory, make their way back to the offices, whether full-time or part-time. However, the date recently announced by the Government of Québec for a physical return to work is not necessarily the same as those planned by companies. Guidelines vary between organizations. Some prefer a gradual return while others aim for March, April, or even June. Plans for the second half of the year could also change. Avison Young’s Vitality Index will allow us to follow this evolution in real time, tracking the pulse of life in the city.
The end of remote work as a health measure
As of February 28, remote work will no longer be mandatory, even if Public Health continues to recommend it across the board, encouraging employers to postpone one more time the application of return-to-office policies that were planned before the onset of Omicron. Resorting to remote work as a health measure has helped companies in the early days of the pandemic, even allowing some gains in productivity while most office employees accommodated quite well.
However, as weeks turned into months, the adverse effects of full-time remote work have become more prominent. A recent global study by Microsoft confirms that, if remote workers were as or more productive during the year, it was at a significant human cost. Fifty-four percent of responders admitted feeling overwhelmed and 39% were exhausted. Time spent in Microsoft Teams meetings more than doubled (2.5 times) around the world, and the average meeting lasts 10 minutes more than before the pandemic. Studies on the adverse effects relating to an overuse of virtual meeting platforms and the “Zoom fatigue” phenomenon are surging. According to a comprehensive study by the Stanford Virtual Human Interaction Lab, the additional effort that the brain requires to send and receive non-verbal communication signals, which happen unconsciously and naturally in person, add to this mental fatigue. This form of communication also forces users to remain relatively inactive, in front of their monitor’s camera, which is unhealthy.
Furthermore, the idea of favoring remote work at all times seems to make less sense when 90% of office workers are vaccinated and can, at any time, attend various public sites and entertainment venues. Many are starting to question whether this measure is still relevant at this point, as office tenants are ready to take action and implement their new workplace strategy. Remote work is here to stay, as it has become part of the new reality, but it will not be as widespread as it was during the lockdown. While there seems to be a consensus in favour of the hybrid model, there are as many hybrid formulas as there are corporate cultures. Tenants need to ensure they find the hybrid formula that best suits their company culture – one that creates unity within the teams and allows people to regain a sense of enjoyment from working together again.
While remote workers have been productive over the past year, it has come at a significant human cost: 54% of respondents said they felt overworked and 39% exhausted.
