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W W W. M A I N E B I Z . B I Z 19 M A R C H 7 , 2 0 2 2 F O C U S WO R K P L A C E T R A N S F O R M AT I O N even that will look different than the past, Lamson says. "I don't ever think we're coming back the way we were," Lamson says. "We will be very flexible when we return." Lamson expects there to be a varied schedule for some employees, while oth- ers, such as maintenance, will be in the office five days a week. "People will come in when there's a pur- pose. Not just to occupy a vacant seat," Lamson says. "If employees come in and there's two people in a 9,000-square- foot space, why come in? People will need to be here for staff meetings, train- ings, team building. But that doesn't happen very often." Nationally, about 60% of human resource executives surveyed by the Gartner Group says they are planning for a hybrid work future, and only 1% say they expect all of their workers to return to work full-time in the office. 'Return to work' has different meanings In Portland, Fidelity Investments recently expanded, taking advantage of office space that was freed up in the pandemic. Fidelity leased 5,600 square feet of additional space on the sixth floor of 3 Canal Plaza in Portland, and renewed its lease of 5,217 square feet on the ground floor. Meanwhile, Tilson, a Portland-based information technology company with more than 600 workers and 18 branches nationwide, says it will allow eligible staff to work from home for as long as they want. Still, Tilson has no plans to give up its headquarters in Portland's East End. "Office space is needed. Folks are not abandoning the office. It's needed for collaborative work. Sure, heads- down work can be done at home. But for younger employees to have a mentor and mix with peers, offices are needed," says Nate Stevens, a partner with real estate firm the Boulos Co. Nationally, insurer Prudential Financial, professional services firm PwC, banking company Citigroup, as well as Google have said they would have a hybrid plan for at least a transi- tion period. "I think you'll see more meeting space," Stevens says. "Hybrid is here to stay. It's becoming an employee satisfaction tool. It's a talent attraction and retention piece, rather than a safety measure now." "Some companies are ready to start changing it up. ey're listening to what people need," SMRT's Stewart says. "Work can be a collaborative hub. We need to be mindful of people who want to work at the office and those who don't. It's about personal preferences." In a recent Boulos survey, fewer than 10% of companies were willing to reduce office square footage or abandon office space. In the survey, 140 respondents from across the state and in various sized companies participated. In response to the question about what the "return to the office" looks like, 59% of respondents indicated that they'll be using a hybrid model incorporating remote work moving forward. Only 36% of respondents answered "all or most employees will work in the office full time" and only 5% indicated that the majority of their employees would work remotely full time. e changes in work environments have had an effect on the real estate market. Just as employees have a stron- ger hand in negotiations with employers, tenants now have an edge over land- lords, Stevens says. Since COVID-19, companies can hire more employees without needing more space due to hybrid work plans. "Tenants have more power now," Stevens says. "Rents haven't increased in two years." at's a change from the recent past. Between the Great Recession and the pandemic, it was a landlords' market. "Landlords called the shots," Stevens says. "e vacancy rate was unhealthy. It was a stagnant market." e Class A vacancy rate in 2019 was only 0.2% but it jumped to 6.5% in 2020, Stevens says. It has settled somewhat to about 5% vacancy currently. e Class B office space vacancy rate was 8% in 2019, and hit 13% in 2020. Now it hovers around 12.5%, Stevens says. "Tenants did not have options. If they had three options before, now they have eight or nine or 10," Stevens says. Portland currently has a glut of office space, with about 837,000 available square feet, with another 336,000 in available sublease space, according to Stevens. Portland's absorption rate last year was 330,000 square feet. At that rate it could take three years to fill the avail- able space. To get to pre-pandemic www.rudmanwinchell.com • 207-947-4501 For over 100 years, Rudman Winchell has served the people and communities of Maine and we are pleased to welcome four new associates to the team I S G R OW I N G Need help finding or retaining a skilled workforce? We finance and advise businesses, helping them to create competitive advantages by investing in good jobs for their employees. 207.504.5900 www.ceimaine.org C O N T I N U E D O N F O L L OW I N G PA G E » Hybrid work is here to stay forever. In general, employees like it. They want the benefits of both the office and remote. — Catherine Lamson MEMIC Group

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