Dream Office REIT CEO highlights companies' need for flexibility and cost-cutting in office use
Michael J. Cooper, chair and CEO of Dream Office REIT, recently discussed Canada’s shifting office real estate sector with BNN Bloomberg.
He highlighted ongoing adjustments aimed at balancing worker preferences with employer cost-cutting objectives.
According to Cooper, many downtown workers across Canada have returned to their offices for part of the week, dispelling earlier concerns that employees would continue to work remotely full-time as they did during the pandemic.
Cooper stated, “We’re now seeing almost 80 percent of the people that used to be downtown (working) downtown on peak days. I think that’s what’s going to drive the use of office space, so I think that it’s not as big a factor as people may have thought before.”
He emphasized that peak-day occupancy is a crucial metric for assessing office space demand, as many companies aim to synchronize in-office days to foster training and collaboration.
“What we look at is what are the peak-day needs for office space… because I think companies want their people in on the same days,” he added.
However, Cooper noted that hybrid work remains a significant feature in today’s work culture, with numerous professionals continuing to work from home on non-peak days.
He acknowledged a shift in workplace expectations, attributing it to the need for greater work-life balance, especially for families.
“I think prior to COVID-19, if you had kids, and a husband and wife worked, it was really hard to keep things together, so I think companies sort of accepted that people need more flexibility to have a proper work-life balance,” he explained.
Cooper identified a different challenge influencing office occupancy rates—the cost-cutting measures pursued by companies in response to a challenging economic climate.
“Companies are trying to reduce their overall costs… you hear about big layoffs, you hear about quiet layoffs, and I think what we’re seeing is companies trying to figure out how they can have less employees and how they can have less office space,” he remarked.
Reflecting on the ongoing adjustments within the office real estate sector, Cooper commented on the unpredictability of office space needs over the past five years.
“This is almost five years since we thought we knew what office buildings would be used for, we thought we knew how many would leave, how many come, and every year, we’re trying to figure out: ‘What’s the equilibrium now?’ Five years is a fairly long time.”
