The last time oil prices hit $100 a barrel nearly a decade ago, Houston’s commercial real estate market flourished.

Real estate investors poured money into Houston. Developers raced to build new office space. Oil and gas companies, flush with cash from the fracking boom, planned lavish new campuses and snapped up long-term office leases, often taking on more space than needed as they looked confidently to future growth.

This time around, $100-a-barrel oil is not stoking the same fervent optimism.

Even with oil prices expected to climb higher, energy companies — burned by two wrenching oil busts in five years — aren’t clamoring for more real estate. Under pressure from Wall Street to control costs, they’ve figured out how to do more with less – including fewer employees and fewer desks — while incorporating remote and flexible working arrangements that became popular with employees during the pandemic.

Throughout the pandemic, many oil and gas companies delayed leasing decisions, opted out of big expansions or consolidated real estate holdings. It’s too soon to say if high oil prices will change that behavior, experts say, but no one is expecting a repeat of the shale-induced real estate boom of a decade ago. Click to read more at www.houstonchronicle.com.

XSPACE IS BRINGING ITS UNIQUE “COMMERCIAL CONDO” CONCEPT FROM AUSTRALIA TO TEXAS—AND FINDING A GOOD FIT IN THE STATE’S BOOMING REAL ESTATE MARKET.

As business relocations to Texas continue, one side effect is a piping hot commercial real estate market.

In late 2021, the National Association of Realtors’ list of top commercial office markets of the year was bookended by Austin at #1 and San Antonio at #10. Meanwhile, Colliers’ 2022 Global Investor Outlook recently forecast Dallas as the top market for commercial real estate investment in 2022. Houston is not lagging either: In the third quarter of 2021, it boasted the largest volume of commercial real estate transactions in the country.

Of course, as every urban Texan knows, the residential side of real estate is also hot. As people move in from around the country, many homes are on the market for the blink of an eye.

Into this ecosystem comes a new “commercial condo” concept from XSpace, cofounded by Australians Byron Smith and Tim Manson.

The XSpace concept is a blend of existing real estate classes. XSpace units are currently for sale in a nearly completed building 15 minutes from downtown Austin, and they can serve a whole range of functions, from showroom to office to man cave to podcasting studio.

Click to read more at www.ytexas.com.

Office buildings have sat largely quiet for two years now thanks to the COVID-19 pandemic. Today, though, the move is on to bring many of these workers back, at least in a hybrid mode in which they work some days from the office and others remotely.

But what do these workers want when they return to the office? What are they looking for from their employers to make the return to the office as stress-free and productive as possible?

Steelcase, the national manufacturer of office furniture, attempted to find out in a report released in February of this year. The report, The New Era of Hybrid Work, surveyed 5,000 workers in late 2021, asking them what they wanted to see in the layouts and functionality of their offices in 2022 and beyond.

The results? Steelcase found that workers want private dedicated workspaces and aren’t happy with completely open office plans. They also want their offices to offer a variety of spaces that support individual work and in-person and virtual collaboration for small and large groups.

Workers are also interested in offices that feel more like home, providing comfortable furniture and greater control over where they perform their work.

Midwest Real Estate News recently spoke with Chris Congdon, director of global research communications with Steelcase, about the results of the survey and the steps companies and office owners need to take to boost the productivity of workers as they return to the office.

Here is what he had to say.

Let’s start with the important question: How would you describe a hybrid workplace?

Chris Congdon: A hybrid workplace is about empowering people to work from diverse locations. Different organizations will have different policies regarding the frequency of when they expect people to work in company offices or their own home offices. Right now, as people come back to the office, that will be fluid. What’s important, though, is that the workspace be designed to support this kind of work. A few fundamental factors need to change from the way office has been set up in the past.

What are some of those changes?

Congdon: At the highest level, you are trying to achieve equity. You want the people who are in the office and the people who are home to all be having a similar experience. You don’t want to compromise part of your employee base depending on the locations from which they are working. The second big factor is engagement. Companies need to recognize that people engage in different ways based on the medium in which they are working.

Consider that during this interview, we are all on Zoom. But not everyone has cameras on. In a lot of organizations, you have people working in an office and people who are on video. If I were to feel that I am not a full-on equal participant in a meeting because I am on video, I might be quieter. I might spend part of the meeting checking emails, tuned out and not engaged.

How can companies create that equity once people are working both from home and in the office?

Congdon: First, it has to be easy for people to do whatever it is they have to do throughout the day. Anything that creates friction for people causes them to resist. A workplace supporting hybrid work has to solve for those issues.

The way offices are set up can help with this. If more people are attending meetings on video, not everyone will be gathering in a big conference room. Instead, people can gravitate to spaces where they have higher levels of acoustical privacy. They can head to enclaves and enclosed spaces that have four walls and a door. You are going to see more people in the workplace needing those spaces.

That is the number-one thing people asked for in our survey: private spaces. That is more important now than before the pandemic. In our survey, 64% of respondents said they need places to do this hybrid collaboration. If companies want to support that equitable experience, they need to offer these spaces.

What else do people want to see from their workplaces as they return to the office?

Congdon: There is an increased demand for privacy. Even before the pandemic, there was a pushback against the open office plan. The way the open plan was interpreted by a lot of organizations was that everything was wide open. People were shoulder-to-shoulder. They were at benches. There was not a place to escape and get any kind of privacy, whether you needed to focus or needed to make a personal phone call.

The push against that was happening before the pandemic. Now you have sent people home for two years. During this time, 70% either had a dedicated private office or were able to take over a guest room or some other space that became their private office. Contrast that with what people have in the office. More than 50% of people are sitting in open workspaces. After two years, people have more control over privacy at home than they do in the office. As they migrate back to the office, they expect spaces with higher levels of privacy. People want that privacy when they come back.

They also want more work furniture that can either be moved easily by the user or by the installer. The demand is for less of a focus on permanence and more on flexibility.

How about safety measures? Are people worried about their safety with COVID and a return to the office?

Congdon: That does continue to be one of employees’ concerns. They want good air quality. There is less of a focus on material surfaces and more on air quality as we have learned more about COVID. Overall, employees have a heightened expectation that the workplace should be a place where you should be able to feel relatively safe from picking up crud, whether that’s a cold and flu or COVID. Organizations that are smart and savvy will focus first on their indoor air quality, on improving ventilation and filtration. They want to be able to say with confidence that they are providing a good turnover of fresh air for the people in their workplace. If they can’t do that, they’ll have to at least find more space for room-based air-purification systems or even personal ones.

Will companies use the improvements to their office space as recruitment tools?

Congdon: They already are. You can see where the investments are going. Organizations recognize that they have to earn people’s commutes. If people have alternatives, you can’t expect them to make those commutes for the same old thing they left behind two years ago. Organizations are very seriously looking at creating spaces that are checking all the boxes: inspiring, safer, designed specifically to suit the kind of work people are doing today.

The pandemic challenged our traditional assumptions about the way things are or might work, and that’s true, too, in the office.

Turns out, not everyone is excited about working from home. And those least excited? They tend to be the youngest members of the workforce, those in Generation Z.

Apartment List in December of last year surveyed workers about their feelings on remote work. And the survey found that older workers were much more excited about remote work than were younger ones.

According to the survey, 36% of workers 25 or younger said that remote work is “extremely” desirable, while 27% described it as “very” desirable. The survey found that 28% found it as “somewhat” desirable, while 9% said it was either “not so” or “not at all” desirable.

Among Boomers, though, 62% said that working from home is “extremely desirable,” while 54% of workers from Generation X agreed. A total of 51% of Millennial workers said the same thing.

What is clear, though, is that remote work remains common as the country continues to come out of the COVID-19 pandemic. According to Apartment List, 51% of workers were working from home at least 50% in April of 2021. By December of last year, that number fell to 44%, still a good number of workers.

And many of those people still working from home expect to be logging plenty of work hours remotely in the future. Eight in 10 people surveyed who do work from home told Apartment List in December of last year that their remote work arrangements would continue indefinitely.

There are nuances here, though. A total of 33% of respondents said they expected to work fully remote for the indefinite future, while 45% said they expected a hybrid arrangement in which they log some work hours at home and some at the office. Only 10% said they expected to work completely on-site in the near future.