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The Office Comes to Hospitality and Multifamily

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The old office is dead. To be fair though, some argue it was dying long before the pandemic. Of course, all of this depends on how you define “office.” In this case, we can define it as a long-term lease for a physical space designed for office work. This has, more or less, been the traditional idea of the office since its inception. When you look at it this way, it stands in glaring contrast with the outlook for what the new office must be going forward. 

One trend that’s been more prominent since the pandemic struck is the idea of flexible space, materializing in a number of ways. Most think of this as flexible office configurations to adapt to COVID-19 guidelines. These are important developments in the evolution of the office but are only one change to the landscape. We are witnessing the blending of office into other property types, like multifamily and hospitality, as businesses do their best to adapt to a socially distant world where restrictions can change almost daily.

Hilton recently announced a temporary venture in an attempt to stop some of the bleeding: a shift to focus on office workers as tourists and hotel guests dwindle. According to Hilton CEO Chris Nasetta, the company launched a pilot program called WorkSpaces by Hilton, where hotel rooms are rented out as office space. While Nasetta doesn’t anticipate this program lasting forever, he believes that people still need a place to congregate, have meetings, and work that isn’t their home—a place that’s free of distractions and that has reliable internet connection. This kind of model is nearly indistinguishable from co-working, aside from one key factor— rooms can be rented privately. 

I spoke with Industrious CEO and co-founder Jamie Hodari about the future of the office and its integration into hospitality and multifamily spaces. Industrious recently partnered with the Wythe Hotel in Williamsburg and Proper Hospitality, which has hotels in Austin, San Francisco, and Santa Monica, to provide private workspaces. For Hodari, there are two primary forces influencing this integration right now. One is that for hotel owners and operators, offering amenities that genuinely add value and make people’s lives easier is so important. “Hotels offering workspaces that really work for the guest, it is the amenity to rule them all for the next decade,” he said. Hodari notes that historically, however, hotels haven’t offered this type of service. Yes, they provide meeting spaces for large conferences, but not so much for individuals. 

Perhaps even more important is the fact that distributed workforces will need to accommodate workers where they live. “As more and more companies transition from having one monolithic headquarters to a more distributed workforce, the average American company’s workplace evolves into a series of options to pick between, on a day-by-day or week-by-week basis. Companies may need 60 different offices rather than simply one or two headquarters,” said Hodari. Using a workspace provider to accommodate office needs makes more sense than signing 60 individual leases. Similarly, when individuals are searching for a flexible workspace, they may not think to look and see what their local hotel has to offer, but instead will probably look for a national provider.

Industrious’ partnership with the Wythe Hotel offered rooms as office space for “on-demand” bookings during weekday business hours. The rooms featured office furniture, a private outdoor space, and were stocked with typical co-working refreshments with daily rates based on size and intended occupancy, ranging between $200 and $275, making them ideal for small companies, meeting spaces, or colleagues looking to work outside of the home. Flexibility within hospitality business models and within the spaces themselves allows hotel owners to pick-up some much-needed revenue from otherwise unused spaces. In the future, this flexibility could be a key component for any new hotel developments in order to offer investments that are fortified to withstand enormous economic fluctuations, like another pandemic (or a second or third wave).

Hospitality isn’t the only sector that’s dipping its toes into office space. As more people begin to work from home, multifamily owners and developers are recognizing there could be an opportunity to capitalize on in-unit flex or office space in addition to adding co-working amenities on site. But reimagining multifamily to include flexible office space goes beyond calling a second bedroom the designated “zoom room,” although that’s also happening. Designing units for work from home or virtual schooling means thinking intuitively about how spaces need to be multifunctional on a daily basis. 

Perhaps in addition to a second full bedroom, the space also features a den or nook that can house a desk and be closed off for privacy if necessary. Furniture like murphy beds could likely see an uptick in popularity because they allow a bedroom to convert to an office during the day. In addition to office space, second bedrooms now might also need to house gym equipment as more people choose to workout at home, even after mandates have been lifted. These kinds of design considerations extend beyond the unit, too. 

Property-wide, multifamily owners and developers need to be creative as they try to accommodate more people not leaving home for work and/or school. Amenity spaces might need to be able to host larger crowds but also be divided in a way that encourages social distancing. Private, bookable “zoom rooms” equipped with the necessary screens and cameras could also become an attractive option for those taking meetings at home that need a quiet space. Both in-unit and amenity spaces will need to have reliable wifi and the bandwidth to accommodate more people in the building at the same time. Providing outdoor communal space should be another consideration, especially in parts of the country where weather is favorable more often than not. 

As our lives blend and adapt to more time at home, our spaces will inevitably need to blend and adapt to accommodate our new way of living. This means that the idea of the office as we have known it is dead. While we don’t know exactly what the future has in store, no one can deny that work flexibility and at least partial remote work policies will be a priority for both businesses and employees going forward—precisely because of the uncertainties that lie ahead. Workplace flexibility allows for business continuity regardless of what is happening in the world, and this is a lesson people won’t soon forget. Blending the office into other parts of our lives was already occurring before the pandemic. The COVID-19 virus was simply a catalyst for the acceleration of change that has forced us to examine the ways we work, play, and live on a much deeper level.

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