Hybrid working is the new normal and businesses are rethinking their commercial space requirements. While this shift offers flexibility and potential cost savings, it also presents unique leasing challenges. We’ve identified five key challenges that tenants face when navigating hybrid work arrangements—and provided solutions to help businesses make the right leasing decisions.

1. Space Utilisation and Flexibility

Challenge: With fewer employees in the office daily, businesses often find themselves overpaying for underutilised space. However, determining the right amount of space without compromising future needs can be tricky.

Solution: Tenants should explore flexible leasing arrangements, such as shorter-term leases or options to expand or reduce space. Negotiating lease terms that offer flexibility can ensure that your space aligns with both current and future business needs.

2. Navigating Lease Obligations

Challenge: Many tenants are locked into long-term lease agreements that don’t reflect their reduced space requirements under hybrid work models. Exiting or renegotiating these leases can be complex and costly.

Solution: Early engagement with a tenant-focused adviser like LPC can help businesses identify opportunities for renegotiating terms, subleasing excess space, or negotiating a buyout.

3. Technology and Fitout Requirements

Challenge: Hybrid work requires a different kind of office space—one that’s optimised for collaboration, technology, and flexibility. Traditional office fitouts may no longer serve this purpose.

Solution: Work with a project services team to redesign your office space for hybrid work. We help tenants create environments that foster collaboration, support tech-enabled workstations, and maximise the utility of available space. Negotiating fitout incentives can also reduce the financial burden on tenants.

4. Employee Satisfaction and Workspace Design

Challenge: In a hybrid model, the office must offer something valuable for employees to want to come in. Poorly designed or outdated spaces can lead to reduced employee engagement and satisfaction.

Solution: Prioritise employee needs in your lease negotiations and fitout plans. Identify properties with amenities that attract employees, such as wellness spaces, easy access to public transport, or on-site services. A well-designed office that aligns with your company culture can be a key driver of employee satisfaction.

5. Compliance with Health and Safety Regulations

Challenge: Hybrid workspaces still need to meet evolving health and safety regulations, particularly in light of COVID-19. This includes proper ventilation, sanitation, and space planning to accommodate social distancing when necessary.

Solution: Engage advisors early in the lease negotiation process to ensure the space you’re considering can be adapted to meet current and future health and safety regulations. LPC advisors help tenant businesses negotiate for necessary building upgrades or lease terms that protect them from future compliance costs.
 

Final Thoughts

Hybrid working presents new opportunities for businesses to rethink their commercial real estate strategies. However, it’s essential to address the unique challenges that come with this shift. At LPC, our "business before space" approach ensures that your leasing decisions support your broader business objectives. Contact us to discuss how we can help you navigate the hybrid working landscape and secure a leasing solution that works for your business.