Remote Working is Becoming Increasingly Popular, With Some Organizations Even Moving Into New Facilities.

Companies that are open to the concept of remote and hybrid work are still betting that the traditional office setting is beneficial to employee collaboration.

CentralReach, a provider of medical software, made the decision a year ago to enable all 373 of its employees to perform their jobs remotely on a permanent basis. After that, the company took the next step and signed a lease for a swanky new office.

The office deal that CentralReach made is the most recent indication that even businesses that support remote and hybrid work may still want new work spaces. These businesses are betting that increased employee collaboration will result from regular office use.

In September, the business will move its operations to a new location in the Bell Works development in Holmdel, New Jersey. CentralReach, which has been in business for ten years, will have the largest office footprint it has ever had after moving into a space that is 25,000 square feet in size. Its current headquarters are located in an outdated structure in the nearby town of Matawan, New Jersey, and for the most part, those offices have been vacant throughout the pandemic.

According to Chris Sullens, Chief Executive Officer of CentralReach, the company’s modern headquarters is a way to entice employees back to the office without having to force them to come in. In the communal kitchen area, there will be an island with bar chairs, and the collaborative work areas will have seating options consisting of couches and armchairs. In their place, there will be more wheeled furniture and whiteboards, and there will be fewer assigned desks.

When they don’t have to,” Mr. Sullens said. “I want them to do it in a way that makes sense where they’re not wasting time commuting when they don’t have to.”

The fact that CentralReach has found a new home provides some reassuring news for owners of office buildings, who have been concerned that the rise of remote work could prompt some businesses to reduce expenses by vacating most or all of their work space. Many businesses have come to the conclusion that they like a combination best.

The relocation of CentralReach’s headquarters, however, brings with it a new set of challenges for property owners. In general, businesses are moving away from older buildings and have a general need for less space overall. CentralReach is expanding its workforce, so despite the fact that its new office will be larger than the one it is leaving behind, the company anticipates that it will ultimately have less space available for each employee.

Under a hybrid strategy, companies claim they can get away with a smaller overall office footprint. According to Mr. Sullens, CentralReach would have had to lease two to three times as much space if all of its workers came into the office on five days per week. On the other hand, he anticipates that on a typical day only about a quarter of the local workforce of the company will be present in the office.

According to Ralph Zucker, CEO of Somerset Development, the company that is developing the Bell Works complex, a number of the businesses that are relocating to the complex are downsizing from larger spaces. According to him, one new tenant is relocating from an office that is 350,000 square feet in size to a space that is 27,000 square feet in size at Bell Works.

The increase in vacancy rates is being driven in part by this consolidation. According to Cushman & Wakefield PLC, as of the end of June, approximately 17.5 percent of office space in the United States was either not leased or was available for sublease. This number is up from 13.2 percent five years ago.

According to Jeremy Witikko, global director of smart buildings at Cisco Systems Inc., he has approximately three conversations a day with businesses that are looking to reduce the amount of office space they occupy. Cisco, a company that supports remote and flexible work arrangements, has announced that it intends to reduce the amount of office space it occupies by approximately 30 percent.

According to Bob Cicero, the leader of Cisco’s smart-buildings initiative for the Americas, employees at Cisco’s Manhattan office are not expected to spend the entire workday seated at their desks but rather to move freely between the company’s various lounges, meeting rooms, and quiet rooms, depending on the type of work they do.

It is hoped that creating an office environment that is less impersonal, more conducive to collaboration, and more up to date will encourage employees to report to work. According to Mr. Cicero, “We are fundamentally of the belief that the office needs to earn the commute from our employees.”

Mr. Sullens has stated that his vision of the office that will exist after the pandemic will be comparable to a university campus. On a university campus, students rarely work in the same location and instead divide their time between their dorm rooms, libraries, classrooms, and lecture halls.

The relocation of CentralReach to the Bell Works building, a property that was originally constructed in the early 1960s but has been extensively renovated over the course of the past decade, includes the acquisition of a wide variety of contemporary conveniences.

The two million square foot complex features shops, restaurants, a Montessori school, a plastic surgery center, a hairdresser, an indoor golf course, and an indoor basketball court. It is also the location where the popular Apple TV+ series “Severance” was filmed.