eXp Commercial President James Huang and Director of Operations Stephanie Gilezan were featured in a Q&A with Connect CRE discussing the "Great Resignation," the ongoing trend of employees voluntarily leaving their office jobs to pursue more flexible remote positions.
Connect CRE: For the past few months, we’ve been hearing about the Great Resignation. Given that some of those who resign may go to work elsewhere, what are the implications of this trend for office use generally and for individual office occupiers in particular?
Huang: The new normal of office and workers is now a hybrid model that focuses on decentralizing the large corporate offices to a spoke and wheel model. Many workers are looking for more flexibility in their work schedules, but corporations are looking for creativity and productivity. I’ve spoken a couple of times on this topic as it is dependent upon industry and practice specialties as to how much you need to meet physically and what can be done remotely. Many companies are watching the trend and getting feedback to determine productivity and collaboration among workers, as employees like the flexibility provided there is the opportunity for this type of work in the market.
Gilezan: Flexible workspaces are going to continue to see an uptick. The need for more flexible/shared spaces will see new opportunities entering the market. For example, our sister company, “SUCCESS Enterprises,” is launching a new concept in shared/flexible workplace solutions called SUCCESS Space. It’s an innovative coworking solution that offers highly flexible, on-demand rental workspaces for individual and group use, access to professional development coaching, media production services, virtual-world communications technology and a full-service cafe. But I do think the virtual office space will continue to be on the rise as well because it allows companies to continue “in-office collaboration” without being in the office. It also allows companies to hire talent from all over the world versus the city where the company is located.
eXp operates both eXp Realty and eXp Commercial in virtual office space, allowing for almost 70,000 agents, brokers and staff to collaborate across 18 different countries. Office use can become coworking space or repurposed for hospitality, climate-controlled storage, and residential space.
Between the “Great Resignation” trend and the question of how permanent the hybrid working model will be, what are considerations that occupiers (office and other sectors) need to make that they may not have had to consider prior to the pandemic?
Huang: After speaking to many occupiers and corporate decision makers, I know that the pandemic has changed people’s work habits and patterns. Because of the lockdown, companies needed employees to work from home or outside the office. It created a new way of working: remotely and via virtual connections. I know this has been discussed and even applied but not to the extent that happened during the lockdown. Because of new workers’ habits and expectations, many companies allow for flexible working options.
Gilezan: Occupiers need to consider the quality of space versus the quantity. Occupiers are likely to focus on smaller spaces that offer amenities for the workforce. Location for visibility becomes less important, which allows more businesses to choose suburban or secondary markets over city or metropolitan areas. Environmental, social, and governance (ESG) strategies are also becoming more relevant so reducing energies on heating, cooling, and lights will also be significant for energy efficiency.
Some aspects of commercial real estate have proven resilient as the pandemic recedes, while others are probably going to be impacted longer term. Across the various property sectors that eXp focuses on, what does the future look like?
Huang: Across the four major categories, multifamily, retail, office and industrial, all have been affected in different ways pre-pandemic, during and as we recover. Out of the four, multifamily has been relatively stable as the need for housing has always been a constant. Also, relocation patterns have slowed in the big cities but now are starting to come back and immigration is still flowing into America. Retail was struggling pre-pandemic and is still trying to find its way but has reduced its presence in many secondary and tertiary markets and changes are even happening in many infilled areas.
Office was the newest victim of the change during the pandemic as it allowed people to get used to working outside of the office and many workers have decided they do not want to go back. But it’s a tug of war on where we will land as we’ve become accustomed to a hybrid world. Industrial was hot, is hot and is getting hotter. The need for warehouses and distribution hubs has increased as e-commerce has increased, with consumers turning to online shopping during the lockdown.
Gilezan: Our office specialists have the ability to collaborate with our SUCCESS Space brand, which offers highly flexible, on-demand rental workspaces but also our Virbela platform represents our virtual office spaces for companies going forward as well as our consulting specialists on reuse projects.
What are some ways in which eXp’s platform can help clients operate in the “new normal” of 2021 and beyond?
Huang: eXp’s company, Virbela, is a virtual platform and is our “metaverse.” It was built in 2012 specifically to solve the challenges of remote collaboration. The platform is what eXp Realty and eXp Commercial use for education, meetings, events and collaboration. It allows for a richer and non-linear experience in the virtual world.
Many have used Zoom, Google Meets and the like but they are very one-dimensional. They are not as interactive and make it difficult to network and build a culture. I have experience firsthand with many different platforms that aim to increase education and networking and build a collaborative culture, and I believe we have that with Virbela. Of course, now with large companies coming into this market and the word “metaverse” becoming a household name, it’s going to heat up as many will try to build this virtual world. We built this long ago and have that “first to the market” advantage, but we need to keep innovating, improving and collaborating.
Gilezan: Because of our eXp World we can educate, collaborate, and build a company in a way that is more powerful than the typical office scenario. We can show the client that same power in innovative ways.
This happens in numerous ways. 1.Our agents and brokers can collaborate on real estate in a matter of moments from all over the globe. Instead of getting experts in one room, we are always together for the benefit of the client. 2. Our staff can live anywhere in the world, allowing us to hire top talent regardless of location. 3. We have learned how to operate without borders. eXp World is owned and operated by our sister company, Virbela. Universities, businesses, churches and event organizations are utilizing Virbela with campuses of their own.
The original article, "Beyond the 'Great Resignation': Q&A with eXp Commercial on Workspace Trends," first appeared in Connect CRE on Dec. 1, 2021.