Beyond the Lobby: The Surprising Trends Reshaping the Office of Tomorrow
As a developer, I’ve navigated the complexities of transforming office spaces, converting offices into apartments to capitalize on higher residential rents and meet housing demand a process detailed in my article, Making Office-to-Apartment Conversions Work . With hybrid work driving high office vacancy rates in some urban markets, such conversions are gaining traction, but the office industry is also undergoing a broader reinvention. In a recent episode of
Leaders Series, Jamie Hodari, former CEO of Industrious and now CEO of Building Operations & Experience at CBRE, shared insights into the future of work following CBRE’s $800 million acquisition of Industrious. Here, we distill the key trends reshaping the office industry.1. Experience-Driven Workplaces Over Traditional Metrics
The definition of a "Class A" office is evolving beyond physical attributes like marble lobbies or prime locations. Hodari emphasizes that modern workplaces must prioritize experience—creating environments that employees want to visit, not just spaces designed to impress executives. This shift reflects a democratization of workplace preferences, where the needs of all employees, from entry-level staff to senior leadership, are considered.
Key Insight: Successful offices foster a sense of community, creativity, and engagement, functioning as "third spaces" that blend work and lifestyle. Buildings like Penn One in New York, with public-access lobbies and vibrant shared spaces, exemplify this trend by prioritizing communal experiences over traditional luxury.
Implication: Landlords and developers must focus on creating magnetic, human-centric environments with high-touch services, such as event programming or shared amenities, to attract tenants. This approach can elevate even Class B buildings into desirable workplaces without requiring massive capital investments.
2. Management Contracts as the Stable Business Model
Hodari attributes Industrious’ success to its management contract model, which contrasts with the high-risk, lease-based models that led to the downfall of competitors like WeWork. Management contracts, where operators manage spaces for landlords or tenants without taking on long-term lease liabilities, offer stability and lower risk, even if they sacrifice explosive growth in boom times.
Key Insight: The lease-based model, akin to leveraging a business with debt, amplified gains in good years but led to catastrophic losses during downturns. Industrious’ focus on management contracts allowed it to weather market volatility and scale sustainably.
Implication: The office industry is moving toward operational models that prioritize flexibility and risk mitigation. This trend favors operators and service providers who can deliver expertise without overextending financially.
3. Neighborhood Locations Outpacing Central Business Districts
Demand for office spaces in residential neighborhoods is surging, driven by employees’ preference for proximity to home. Hodari notes that Industrious locations in neighborhoods like Cobble Hill or Lincoln Park fill up significantly faster than those in traditional central business districts (CBDs). This trend reflects a broader desire for convenience and integration of work with daily life.
Key Insight: Employees value short commutes, similar to their preferences for gyms or restaurants, which has historically been overlooked in office location strategies. The success of neighborhood offices underscores the importance of accessibility and local amenities.
Implication: Developers and operators must explore unconventional spaces—such as repurposed retail or residential buildings—to meet demand in underserved neighborhoods. This could involve creative conversions of non-traditional assets to create vibrant, community-oriented workplaces.
4. Hybrid Work Driving Demand for Exceptional Offices
Contrary to the assumption that hybrid or remote-first companies care less about office spaces, Hodari highlights that firms like Atlassian, known for flexible work policies, are investing heavily in creating exceptional workplaces. These companies recognize that to entice employees to the office, the space must offer a compelling experience that justifies leaving home.
Key Insight: Hybrid work models amplify the need for offices that deliver unique value, such as collaboration spaces, wellness amenities, or cultural programming. Enterprises are seeking partners to manage these experiences efficiently.
Implication: Landlords must rethink office design to include flexible, multi-use spaces that support varied work modes—brainstorming, socializing, or focused tasks—while outsourcing operational expertise to firms like CBRE.
5. Integrated Operations and Experience as a Competitive Edge
Hodari’s role at CBRE underscores a growing trend: the integration of technical operations (e.g., HVAC systems, building management software) with high-touch, experiential services (e.g., concierge-like greetings, curated events). Drawing an analogy to Disney, he argues that seamless operations and delightful experiences are not in tension but mutually reinforcing.
Key Insight: CBRE’s reorganization to create a Building Operations & Experience segment reflects the industry’s recognition that running modern buildings requires expertise in both technical and human-centric domains. This holistic approach is becoming a differentiator for top-tier service providers.
Implication: Real estate firms must invest in operational excellence and employee-facing services to meet tenant expectations. This could involve hiring specialized talent or leveraging technology to streamline back-of-house and front-of-house functions.
6. A Return to Coworking’s Roots for Smaller Teams
While the flex office sector has shifted toward serving enterprise clients, Hodari sees an untapped opportunity in coworking-style offerings for small teams and individuals. The retreat of major operators from the “desk-rental” model has left a gap for affordable, community-driven workspaces that leverage modern technology for seamless booking and utilization.
Key Insight: A 2012-era WeWork model, enhanced with 2025 technology (e.g., software for reserving phone booths or meeting rooms), could thrive by addressing the needs of small teams and combating social isolation. This aligns with broader cultural trends, such as the loneliness epidemic, where workplaces can serve as social hubs.
Implication: Entrepreneurs and operators have an opportunity to revive coworking by focusing on affordable, tech-enabled, and community-oriented spaces, particularly in underserved markets.
7. Redefining Asset Value Through Operations
Hodari challenges the traditional real estate mindset that views buildings primarily as stores of value, with operations as an afterthought. Instead, he advocates for a model where operational excellence—through centralized management akin to a hotel GM—drives asset value and tenant retention.
Key Insight: For a hypothetical Class B building in Midtown, Hodari proposes two strategies: (1) transforming the entire building into a productized, hotel-like workplace with shared services, or (2) creating a vibrant “nerve center” on lower floors to support upper-floor tenants with amenities and experiences. Both approaches prioritize operational efficiency and tenant experience over traditional leasing models.
Implication: Landlords must shift from passive asset management to active, service-oriented operations to remain competitive. This could involve reconfiguring buildings to include shared spaces or outsourcing management to specialized firms.
8. Blurring Lines Between Physical and Digital Worlds
Looking ahead, Hodari predicts that the office industry will grapple with integrating physical and digital experiences. As the boundaries between these realms blur evidenced by people navigating cities with smartphones, workplaces must adapt to deliver seamless, hybrid experiences that combine in-person collaboration with digital connectivity.
Key Insight: By 2035, the industry will focus on how physical spaces enhance digital workflows and vice versa, creating environments that feel intuitive and interconnected.
Implication: Developers and operators should invest in technologies like smart building systems and AI-driven workplace tools to create adaptive, user-centric environments that bridge physical and digital interactions.
Conclusion
The office industry is at a pivotal moment, moving away from rigid, productivity-focused models toward flexible, experience-driven workplaces that prioritize employee well-being and community. Jamie Hodari’s insights highlight the importance of operational innovation, neighborhood-based locations, and integrated service models in redefining what makes an office desirable. As CBRE leverages Industrious’ expertise to transform building operations globally, the industry is poised for a future where workplaces are not just places to work but vibrant hubs that enrich lives and foster connection. For landlords, developers, and operators, the challenge is clear: adapt to these trends or risk being left behind in a rapidly evolving market. For more details, listen to the full interview on the Thesis Driven Leaders Series here.
Juan Salas-Romer