Des Moines Office Market Is on the Rebound
By Chris Curran and Mark Mills, R&R Realty Advisors
Would you rather earn more money or have a more flexible work/life balance?
Before the pandemic, many employees gave the latter as their answer. But the amount of money employees claimed they would forego wasn’t exactly peanuts. According to a pre-pandemic study by career site Joblist, the average employee was willing to give up around $10,000 per year to have better work/life balance.
Fast forward to the present day and employees continue to express this desire. The isolation felt by many when working from home has increased the blurriness of the line that separates work from life.
In fact, a survey conducted by TELUS International found that isolated workers reported a nearly 80 percent increase in work-related stress and anxiety when working from home. Given these findings, perhaps it shouldn’t surprise anyone that three out of four office employees express a desire to return to in-person work.
If there’s a silver lining to the unprecedented year we’ve been emerging from, it may be that employees and employers alike are coming to understand the value in providing a balance between work and personal time. And, when it comes to the office market in a community like metro Des Moines, we’re seeing this increased understanding play out in a variety of ways.
But first, let’s start with the basics. On an almost-daily basis, we’re asked if the office market will ever come back. Are we seeing any interest? Are businesses even interested in office space anymore?
The answer to all those questions is an emphatic yes.
We believe in this emphatic “yes” because only about 35 percent of surveyed office employees feel more productive when they work from home. We believe in this “yes” because according to a survey by JLL, 61 percent of remote workers crave real, human interaction on a daily basis. And, we believe in this “yes” because nearly 70 percent of parents feel consistently overwhelmed by working from home with small children present.
Yes, the office will still matter.
With that being said, most post-pandemic office spaces are going to look and feel different than those from the pre-pandemic times. When businesses survey their employees about returning to work, many express desires for a “hybrid model” where flexibility is prioritized. Many employees also express a desire for socialization zones like coffee areas, lounges and even rooftop and outdoor patios to be included in their workspaces.
In the Des Moines market, where commute times are typically 15 minutes or less, we’ve seen a somewhat fast return to the office from small and mid-size businesses. Those who have taken things slower are diligently exploring their options. This is especially clear when we took a look at our showing numbers. From January to May of 2020, R&R Realty Group took customers and prospects alike on 119 showings. Over the same period in 2021, that number was 214. And, from those 214 showings, we signed 35 new deals.
What we’ve learned from these showings and deals jibes pretty closely with reported national trends. Businesses are prioritizing features that will incentivize their employees to choose the office as their working location. Just as the pandemic accelerated existing trends in areas like technology, we’ve seen the recovery accelerate existing trends in workspace design.
Trends like biophilic design are seeing a substantial increase in focus. Now, for those of you who didn’t go to design school, biophilic design is essentially the practice of incorporating nature into a workspace. This can be done with something like a moss wall or simply upping the number of indoor plants in a space.
Studies show that employees feel less stress when they’re exposed to doses of the natural world throughout the day.
Another trend gaining steam in this recovery is the common area. In many settings, the pre-pandemic trend was to transform an office into a collaborative “camp site” with no assigned seating or interior divisions.
The post-pandemic trend we’re seeing is something of a reversal. Businesses are interested in giving their employees a wider variety of environments, such as private focus rooms and offices, along with more communal and collaborative areas for people to work together. Essentially, we’re seeing the end of the “one-size-fits-all” workspace and ultimately, we believe employees will be happier and more productive because of it.
So, what does all of this mean for the Des Moines office market? Well, we believe it means that offices and the collaborative environment they foster are here to stay. Nobody can predict the future, but if current trends are allowed to play out, we believe we’re going to see a healthy office market where businesses embrace employee-friendly design trends.
But, above all else, we believe we’re going to see a future where employees are encouraged to collaborate with one another in a flexible, productive and positive environment.
Chris Curran is senior vice president and Mark Mills is commercial real estate director with R&R Realty Advisors. This article originally appeared in the June 2021 issue of Heartland Real Estate Business magazine.