Top executives from three of the most successful commercial real estate firms in the world spoke recently in Phoenix about what the office of the future will look like here and across the nation during and post-pandemic. 

While the face of commercial office space could see permanent changes as it adapts, they all predict that the Phoenix metro region, unlike some other large cities, will continue to see healthy growth in the sector. 

Office space is not going away, they said. 

“In just the last few weeks, there’s been a huge uptick in activity in inquiries, and companies are going to continue to look at Arizona,” said Cathy Teeter, managing director of the Phoenix office for CBRE, the world’s largest commercial real estate services company.

Affordability and lifestyle — including the ability to “park your car in a garage or adjacent to your house” — are top reasons the Phoenix area continues to attract interest, she said.  

Teeter and two other experts spoke this month at a meeting of the nonprofit Valley Partnership, the voice of the real estate industry. 

Martha dePlazaola Abbott, co-managing director and principal at Gensler, a global architecture, design, and planning firm, and Molly Ryan Carson, senior vice president and market leader of the Southwest region for Ryan Companies, a national builder, developer, designer, and real estate manager, also were panelists. 

They discussed what the industry is doing to reimagine and redesign the office environment. They are turning to employees through surveys and other means to make those decisions. 

Surveys show most people want back in the office

Employee surveys indicate most Americans do not want to work from home full-time. But they do enjoy the flexibility of being able to do so, they said. 

In May, Gensler’s Research Institute published the U.S. Work from Home Survey 2020 that provides insight into the home experience and how it is influencing people’s expectations for the future. The study surveyed more than 2,300 full-time U.S. office workers at companies of 100 or more people from April 16 to May 4. 

It found that employees overwhelmingly want to return to the office, but with changes to address the pandemic. Also, many workers, particularly young and new employees, are struggling in the home office setting.  

Among the findings:

• Only 12 percent of workers want to work from home full-time
• Seventy percent of people want to work in the office for the majority of their week as long as there is more space for social distancing and other safety measures
• Fifty-five percent of respondents said working from home makes collaborating with others harder, and 51 percent said staying up to date on the work of others is more difficult
• Millennial and Gen Z workers report being less productive and less satisfied at home
• People expect to return to the office, but it should look different with stricter sick policies and cleaning and space configurations for physical distancing

The office of the future  

Teeter said CBRE surveys show employee retention and safety is a critical concern for companies. So whatever it takes to keep employees happy and healthy will dictate how they move back into the office, she said. 

“People want flexibility. They don’t want to give up their place at the office. They just want to have flexibility in making that decision for themselves. They want to work remotely between two and three days a week.”

All three panelists said many companies will respond with a mix of options for workers. Physical distancing will dictate the new office configuration.

Abbott of Gensler said, “Seventy percent of employees don’t want to be at home all the time, so they (clients) are trying to create a hybrid environment where you come to the office for meetings and collaboration but you do your focus work at home.”  

Arizona can expect healthy future for commercial office space   

Meanwhile, fears of office space stagnating and rental relief requests are not surfacing in many regions, the panelists said.  

In Arizona, they report seeing an uptick in interest for relocations and expansions from a mix of industries: technology, healthcare, manufacturing, insurance, pharmaceuticals, financial technology.

Ryan Companies’ Carson said she’s seeing clients talk of needing more space, not eliminating it with more employees working remotely.  

“We haven’t had many companies say they are downsizing. They are not people downsizing. Now, they’re thinking when they come back to the office they’re going to need that additional elbow room and how can they do that with their square footage.”

As the workplace evolves, Arizona will continue to be a desirable location for many reasons including its central location, Carson said.  

“You can get virtually anywhere from here now. It has become a place for everyone. It’s for the hourly employee at a call center and it is for a CEO, and it is for having both of those individuals under the same roof. This is becoming more common now because of that desire for synergy, communication and shared thought within the office.”

For more information about how offices can reopen safely, go to:

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Arizona Center, the mixed-use shopping center in downtown Phoenix, was constructed in 1990 to jump-start the city’s revitalization of its urban core.

Now, the work-shop-play hub has a $25 million renovation, transforming Arizona Center into a modern, functional destination for local students, families and businesspeople.

“When we looked at first acquiring Arizona Center, we saw what we thought was a generational opportunity to acquire a 16-acre ‘super-block’ in an urban center, and that’s very rare anywhere in America,” said Matt Root, CEO and managing partner at San Diego-based , which acquired Arizona Center in 2015.

Among the additions to the property are a 60-foot LED screen on the northeast corner of Van Buren and Third streets, all-new landscaping and water features, additional lighting and signage, new colors, more bike racks and a stage for live entertainment.

The Grotto, a three-acre park at the center of the property, features new seating and cleanly remodeled fountains; the original Arizona Center frog statues are still standing.

“People want to move to cities with a high quality of life and cities that have long-term job formation, and Phoenix is really at the top of that list,” Root said. “There’s a big growing movement to restore the vibrancy and really enhance the experience of urban life for people; that’s really what we’ve been working off of.”

The “city of the future” is one that values walkability and a variety of uses, and the “right urban mix” of utility and entertainment draws more residents, creating a denser city center, Root said.

“That density raises values, and that vibrancy attracts investment capital, and that’s what you’re seeing in downtown Phoenix today; all those things are happening,” he said.

The establishment of Arizona State University Downtown Phoenix Campus, which houses the Walter Cronkite School of Journalism and Mass Communication and the College of Nursing and Health Innovation, was the catalyst that kicked off more than a decade of refurbishment and revitalization in the area, and a number of developments followed.

Other nearby attractions include CityScape, a high-rise mixed-use development completed in 2012; , another high-rise mixed-use project at CityScape slated for completion later this year; , an urban arts district that features local artists, musicians and food vendors at its monthly events; and the , which completed its most significant expansion yet in 2008. The Translational Genomics Research Institute (), a state-of-the-art nonprofit genomics research institute, is from the Arizona Center.

“Employees today, they desire a work-life balance and something that encourages community-building, collaboration and engagement,” Root said. “We think of that as ‘place-making’ — creating a sense of place where people want to encounter each other and share daily life; walkability, creating urban environments that people can live, work, shop, learn without having to rely on cars; sustainability — always big — and then a mix of uses.”

Several large sports, music and entertainment venues are within walking distance, including Chase Field, home to the baseball team; , home to the Phoenix Suns basketball team; Herberger Theatre; Phoenix Symphony Hall and the Orpheum Theatre.

Urban areas filled with an engaging variety of activities can generate 24/7 activity, Root said. The new-and-improved Arizona Center features “great restaurants, health-and-wellness amenities, an immersive cinema experience, amenities that really create a more personalized experience and help employers attract and retain talent and help employees want to go there.”

The new Arizona Center launched in January 2019, bringing more than 40 local small businesses and farmers to the Grotto every Wednesday from 4:00 p.m. to 8:00 p.m.

New tenants in the retail space include Freshii, a fast-casual nutritious food joint, Bosa Donuts, a popular local shop with locations across the Valley, and Kwench Juice CafĂ©. ASU’s Thunderbird School of Global Management has leased office space, too.

The AC Hotel by Marriott will in May of this year on the east side of Arizona Center. The “urban-inspired” hotel will stand 13-stories tall and comprise 199 “classic, yet modern” rooms, as well as a fitness center, rooftop bar, pool and lounge.

Palm Court Tower, a 31-story, 350-unit luxury residential complex is by North American Development on the northwest corner of Van Buren and Fifth streets later this year. About 10 percent of the units in Palm Court Tower will be designated affordable housing, according to the Arizona Center.

The existing AMC Arizona Center 24 movie theater is 90,000 square feet and has 24 screens, which Root said is an “outdated” model. A cinema about half its size will be constructed in its place, and additional retail and residential space — possibly student housing — will eventually be attached on the theater’s north side.

“We have a number of regional and national theaters right now that we’re finalizing negotiations [with], including our existing operator, AMC, to redevelop that whole footprint into a more immersive theater that changes the way we experience film,” Root said. “Think of in-cinema dining, bar offerings, reclining seats, really just a great experience to bring people together.”

Root estimates the coming development will have an impact totaling $300 million to $400 million. He said he believes the changes will create a “tremendous economic boom” for downtown Phoenix.

The key to the Arizona Center’s future success is in creating an authentic community atmosphere in a public space that makes people want to meet each other and “feel the joys of daily life,” Root said.

“You don’t want to force it; you want to make it happen organically,” he said. “You want to feel like, ‘I want to go there,’ and it’s an engaging, immersive experience, and I think that’s what’s happening at Arizona Center.”

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