Hub & Spoke: A Suburban Myth
In the early days of the pandemic there was a lot of chatter about so called “hub and spoke” real estate strategies that would cause occupiers to establish a city center hub and branch out to the suburbs with smaller satellite offices…the spokes. In the bay area, this trend has not materialized. The absence of consistent levels of demand that characterized the pre-pandemic office market has left a void for speculation. Much of the speculation comes from parties whom have a vested interest in the outcome. Suburban landlords optimistically viewed the pandemic as an opportunity for heightened demand for their product (and this may still turn out to be the case). But the truth is much of the current discussion around office demand is not informed by actual data (e.g., actions taken by tenants).
Hub and spoke is a challenging strategy for many companies. Why? Firstly, absent a large presence in a region, it’s not practical. For mid-size and small companies, the net effect is simply to add more office space and increase cost. And the presence of multiple offices may serve to fracture the culture by making it more difficult to bring employees together. But perhaps most importantly, many companies remain uncertain about how to define their workplace; say nothing of taking the bold step of a hub and spoke strategy.
Our advice (unsolicited though it may be) is to use this time to thoroughly assess how best to support your employees’ health, happiness and productivity. To get there, you need to engage them in the process. Their needs will be varied and one size solutions will inevitably create some dissatisfaction among factions of the work force. The more simplistic the approach, the easier it is to manage (which doesn’t mean it’s the best solution). There is a spectrum of solutions, from fully remote (no office) at one end to 100% in office at the other. Everything in between is “hybrid”. Choosing a hybrid approach already brings complexity. How do you use the space? Who will be in the office and when?
One of the primary reasons for office space, after all, is to promote and support employee productivity. Traditional real estate services are designed to aid in the acquisition of space. Way back in 2018 (in these “pandemic years” that seems like a lifetime ago) we launched TenantSee as a resource to help occupiers begin their real estate process in a different place, by defining their optimal space need first – not just in terms of how many people and where, but also “why”. We push our clients to think more completely about their office space, to combine critical data from People, Finance and Workplace in order to arrive at clear objectives and to ensure the real estate solution(s) effectively serves these objectives. There’s no short cut to getting this right - - - be careful not to hit the “easy button” by choosing a strategy that seems popular (hub and spoke) but for which you lack supporting data (e.g., a thorough understanding of how the approach serves the need).
P.S. We’re excited to announce that Greg will participate in an upcoming panel discussion at the CoreNet NorCal Chapter Meeting on February 17th – the event will be virtual. The topic: The New Geography of Work. Greg will be joined by Chandler Bonnie of Dropbox and Kate Lister of Global Workplace Analytics. The panel will be moderated by Robert Teed of Intergroup. We hope to see you there!