Latest news with #commercial real estate
Yahoo
a day ago
- Business
- Yahoo
Office workstations could get even smaller: JLL
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: While many bosses doubled down on their return-to-office mandates earlier this year, employers also appear poised to shrink the individual office workspace they allot to employees who do show up, according to a recent survey from JLL, a global commercial real estate and investment management company. Companies are aiming to tighten the so-called density metric, or space allotted per person, to an average of 132 square feet per person from 165 square feet per person and to increase the seat-sharing ratios to 1.3 person per seat currently to 1.1 people, according to JLL's 'Global Occupancy Planning Benchmark Report 2025.' Companies can cut more costs with 100% 'agile seating' or completely unassigned seats, the report states. 'Most organizations (78%) report having defined standards for space functions to guide workplace planning, actively working toward smaller, more standardized sizes for office and workstations,' the report states. Dive Insight: Employers — along with their finance executives, real estate and human resource departments — have been faced with many new challenges around work policies and how to budget for and find the right office setup since the pandemic accelerated the popularity of remote and hybrid work more than five years ago. Where and how people work has been transformed by technology and a shift in cultural norms. The global office utilization rate — which measures the percent of time that individual office seats are occupied during the workday — inched up to 54% this year to date, above the year earlier's 49%, but still below the pre-pandemic 2019 level of 61%, according to the report. Companies are still seeking to adjust their workspaces to align with the range of work options, according to the JLL report, which was based on a survey of 99 organizations that collectively hold global portfolios of more than 745 million square feet of commercial real estate. While 18% of workers are currently fully remote and 15% are in the office five days a week, the majority (67%) are hybrid and in the office from one to four days a week. In order to accommodate that fluid environment and keep costs down, many companies are shifting toward space sharing. Nearly one fifth (17%) of the respondents said they were decreasing space dedicated to enclosed offices with only 3% increasing them, while 13% said they were trimming back dedicated open workspaces compared to 3% who are adding them. At the same time, the standard size of offices and open workstation spaces appear poised to shrink. Some 65% of companies said they are targeting average enclosed offices that are 125 square feet or less, which is smaller than 58% of the company's current typical offices. Meanwhile, 78% of companies are aiming to offer workstations that are under 50 square feet in size even though 32% of the respondents' average current work stations are bigger. Many companies are also jettisoning receptionists and waiting areas, file and storage space and copy and print rooms. What they have added to the space are some places to do focused work and have some privacy. These include phone rooms, storage lockers and small huddle rooms. 'While maximizing space utilization remains a priority…organizations are recognizing the dual role of the office in hybrid environments — both as a collaboration hub and as a space for the focused work that remains essential for most employees,' the report states. Sign in to access your portfolio
News.com.au
5 days ago
- Business
- News.com.au
Trump role in Melbourne CBD office market's suburb-sized hole
Melbourne's CBD has a suburb-sized hole in its office market as workers refusing to return and Donald Trump's tarrifs further delay it's already difficult recovery from the pandemic. Commercial real estate firm JLL research shows the city recorded its second straight quarterly improvement in increasing office space take up in the past quarter, with 11,900sq m more space filled at the end of June than at the end of March. They've estimated rising demand chewed through 50,000sq m of vacant office buildings across the first half of 2025, dragging the CBD's total office vacancy rate back below more than a million square metres, where it peaked late last year. Annabel McFarlane, Head of Strategic Research at JLL calculated that without any major changes to the available supply of office space, about 385,870sq m of it, an area bigger than the Botanic Gardens, still needed to be filled in order to recover to its 10-year average vacancy rate of 11.2 per cent. Currently, about 18.2 per cent of the city's office space, or 983,830sq m is empty — bigger than some suburbs, including Ripponlea and Gardenvale, and close to the size of Cremorne and Deepdene. 'However, we are already seeing the best assets and locations start to fill up,' Ms McFarlane said. 'Melbourne's CBD prime net effective rental growth returned to positive in the second quarter of 2025 and secondary net effective rents have stabilised.' If the city continued to fill another 50,000sq m of office space every six months, it would take most of four years to get back to its pre-pandemic self. However, JLL joint head of leasing advisory Nick Drake said it was likely to be faster than this, with rising population driving increased demand for space in the CBD — as well as a trend of head offices for major firms heading to the city from the suburbs this year, including Coles, home builder Simonds and logistics firm Toll Group. 'Melbourne's demand factors are stronger than a lot of the rest of the country, and it's affordable compared to other cities,' Mr Drake said. 'There will also be some buildings that will be converted to other uses. And there's some sites that have just been shelved for now as development is hard to stack up, so we won't see a lot more coming up for the rest of the decade.' He added that there could also be significant boosts to leasing activity as fallout from US President Donald Trump's tariff policies settles in the coming months, with the confidence boost that stability would bring potentially enough to fill another MCG or two of CBD office space. With the past quarter's office uptake softer than the first three months of the year, Mr Drake noted many businesses were looking but not committing to leases amid the fallout of Trump's announcements. Another major change of direction could come if more businesses set return to office mandates, with a growing share of CBD-based firms now requiring their staff to attend the building at least three days a week. Melbourne became the most locked-down city in the world during the Covid-19 pandemic, and its office workers have been among the slowest in the nation to return to their buildings. That lack of staff returning has led to a number of large operators downsizing office spaces in the city's centre, and to it having the highest vacancy rate in the nation. By contrast to the Victorian capitals more than 18 per cent vacancy rate in June, less than 10 per cent of Brisbane's office space is currently seeking a tenant. And while Melbourne's June quarter office space absorption covered 11,900sq m, the figure in Sydney was 23,500. Further positives in the JLL market analysis included a 1.4 per cent increase in rents over the past three months. There is also rising strength in the city's most popular destinations, with the east end of Collins St, also known as the Paris end of the popular strip, now becoming difficult for firms to find any space in. Demand is also up at the west end of Collins, and improving in Docklands, but relatively flat around most other parts of the CBD.
Wall Street Journal
15-07-2025
- Business
- Wall Street Journal
Private Credit Can Bring Risk Along With Liquidity to Commercial Property Finance
Private credit's growth is adding liquidity—and risk—to the U.S. commercial real-estate market, according to a report from Moody's Ratings. Interest rates staying higher for longer and recent declines in property values are expected to drive more CRE borrowing to nonbank lenders in the coming years. Against market headwinds, private credit has stepped in to fund borrowers that may not meet traditional banking standards, according to Moody's.
