Is the hybrid work life dying?
I’m going into cre brokerage and at first wanted to stay away from the office asset class but recently have been hearing of more places requiring their employees to return to in-person. Is this something others have seen happening?
It’s all company by company. People have become almost ideological about it, so most leaders just implement their own personal preferences and then justify it after the fact.
3-4 days in the office is such a sweet spot no brainer to me that it is difficult to even understand “everyone has to be at their desk every second or they aren’t working” evangelists or the people who think coming in from time to time is a restriction on their personal freedoms, but that ultimately comes down to my own personal preference too I suppose.
4 days a week isn't a sweet spot and definitely is not a no brainer, that's what it was pre-pandemic minus Friday (which someone of us were able to do pre-pandemic anyway). I think what 2020-2021 showed us is that we don't need to be in the office.
I think firms are going to be able to recruit talent a lot easier having significantly more flexibility than offering 1-day a week you might be able to work form home - this seems like a pretty outdated mindset.
My group has us be able to work from home 5-days a week unless we have a team-building event, a networking event, or a client-facing meeting (although even clients don't want to meet anymore - they'd rather attend a zoom meeting and get multiple hours of their life back).
Culture dependent… but if you’re a young kid like most on this forum, you absolutely cannot let your boss and key decision makers there be there more than you. Exceptions apply if a large chunk of your job requires travel/property tours.
Sorry I meant office as in the asset class. I know my early years will be primarily in the office
How can I find a job that require travel/property tours, what would be the title of such a position? Thank you.
Most jobs in acquisitions and brokerage require a lot of property tours. However, at larger/more institutional firms acquisitions will most likely be more focused on being chained to a computer screen at the junior level. Also, it depends how regional/national your firm is. If you focus on a small geographic region, it will be mostly driving around to places not too far from your office. I knew someone you did core office acquisitions pre-COVID and he was always traveling all over the country to look at buildings in different cities… not sure what he is up to these days. Was definitely a cool job for someone who likes to travel.
Luxury hotel acquisitions in vacation destinations seems like it would be an awesome job in terms of travels perks but I don’t know anyone personally who does that.
Not at my bank. But tbf I'm in a good group. People go home around 7ish and wfh. Yesterday I left at 6.30pm.
People also do wfh completely some days but that's more because there's renovations happening and there aren't enough seats.
WFH never really took off in REPE unfortunately.
Can’t imagine why that would be.
Relationship Business
Like others have said, it's pretty company specific but feel like most CRE shops have been trying to be in office more so than others.
FWIW, my team (mainly the juniors) have been in office four days a week since spring/summer of 2021.
What a bunch of Hardos. I try to keep my office time to 2x a week tops
I’ve worked remote 1x in 3 years
I don't think office is a good asset class to get into.
I have insights on deal flow for office leasing and brokerage... and let me tell you what I'm seeing:
- Lots of blend and extends - i.e they are making the lease term longer and blending the rate into something that is "win-win" for both landlord and tenant. Usually the face rate is lower but term is longer
- Lots of moving away from landlords who are too stubborn with lower market rates
- Lots of renewals ... $2 PSF commission --- yikes not a lot of dough moving around especially with 50/50 house split and before any split with a senior broker.
At the end of the day, if you look at the above.. and think what type of brokers are going to be winning these deals? It is ofcourse all the senior ones with EXISTING relationships. It will be hard to make your way into this nether and outcompete existing relationships. You can team up with a senior broker and try to win those relationships over when they retire.
In conclusion, I would avoid office asset class specialization if starting in brokerage from 0.
Counter point. People having this exact sentiment makes a great bull case for young brokers to go into the office vertical.
It is true but you have to believe in the asset class and be willing to work against the macro environment for a few years as the future of office shakes out.
The newest headline is "yes, employees are being mandated to return to the office". Will this spur demand for more office space? Probably not. Lots of big companies right now have been going through rounds of layoffs and those mandating employees back are just trying to get them to quit so no severance has to be paid on the long wfh honeymoon. There are leases getting done and in some markets delivery of new trophy office assets. Most of the tenants taking occupancy of this space are really top tier companies, paying top dollar per square foot. Companies below that really aren't moving or adding more square footage to their portfolio.
https://www.wallstreetoasis.com/forum/real-estate/office-to-residential…
Here's the thing, people like remote work (I know someone will say they like in office but bigger majority like remote, just look at Amazon now). It saves time on travel that can be used for other things, saves money, and having to prepare to go in (clothes/food/style). So, as we move forward, things will have to change. I always think, we say kids out of college will have to adapt to employers, when really, employers will have to adapt to employees. Think about attire, everything use to be suits and ties, know why its more relaxed, because people who like it relaxed got into positions of power, now you can wear anything but shorts. Another thing I think, this is also one of those things social media changed, meaning, work use to be your life, you couldn't text someone or message them at work, so the people you worked with became better friends. Now, everyone can stay connected, so though you are friendly with people at work, you somewhat can stay connected to your old friends; real long way of saying, people just see the job as a job.
Eventually people will come to leadership positions where they don't see it as important to go into office. Does that create an opportunity for offices or to do something else with offices, yes. We just don't know what that will be until someone solves it.
All megafunds are 5x in person
Seems like 4 days might end up the long term compromise. 3/2 was more common a few years ago but now all my friends and I get one day remote, typically Fridays. NYC/SF finance. SF a lot more likely to be 3 than 5 days in office. NYC buddies are 50/50 4/5 days in.
Even just one work day at home feels so damn good. That extra day of not going in is paradise.
Absolutely. I work from home Fridays and it saves so much time that we would otherwise be pencils down given the pace of my office. We have IC Friday mornings, so after that we just call it a week and fuck off to run errands or golf. My week starts winding down with a Thursday lunch beer. Immaculate.
I think this is highly dependent on market. Office leasing will always be a thing. It may just be less than in was in 2019 and require more creativity to make money. I’ve had a few friends join strong teams in 2020/2021 and they are doing well. But I think it depends on market. For example, NY has the top 3 largest office markets in the country (midtown / midtown south / downtown) with each being greater than 75M SF. Pretty sure midtown is 400M SF. With that size - you can carve out a business. But if you’re doing it in Fort Lauderdale - I would probably say really think about what you want.
If you want to be in the office market long term - go for it. Just know the future is not certain and it may be going thru a downsizing.
Here's my gripe with work from home....in my opinion, it's just a productivity killer. In general numbers, here's how I would characterize the ouput of most of my firm on wfh days:
1. 20% of the company - works just as hard at home as in the office....maybe even more productive
2. 60% of the company - spends 3 to 4 hours of the work day at the grocery store, sneaking in a yoga class, and babysitting kids
3. 20% of the company - literally does not work at all. If you call them directly on their cell, they will run to their computers to do work but other than that they literally have done jackshit on wfh days
I'm not saying that wfh days are going away. They are a perk.... a benefit that may become expected just like 401K match or paid vacation, but let's not kid ourselves that wfh is anything but a productivity destroyer for the vast majority of employees who abuse it.
Who cares if someone gets in a workout when working from home, nerd? Output is what matters in this business, not input. Stop it with the nanny mentality.
Yeah....the output is terrible. That's what I'm saying. Instead of getting 40 hours of productivity per week, I'm seeing 35 hours.
I am not seeing people go to the gym and then make up that lost productivity later.
If you can fit in 40 hours of productivity into a 35 hour work week, that's great - I want those kinds of employees! Happy to have them work out whenever, but that's not what I'm seeing. The majority are falling behind on work that they otherwise should have done that day.
I’m sure it does suck that you are losing the only edge you really had — working more face-time hours than anyone else.
We know who you are….
I think the pros of office as an asset class right now for a young grad is that the amount of younger grads going into office has fallen off a cliff over years. Sure deal volume and leasing activity has decreased, but supply of office remains virtually the same and companies continue to need at least some footprint, though likely smaller. I think that young people that go into office now and cut their teeth will be really well positioned in the future, when they’ve got 5-10 years of experience and the would-be competitors in their peer group instead decided to go multi family, industrial, etc. At the end of the day there’s still deals to be done and somebody’s gotta do them. Or at least this is what I tell myself so I can sleep at night
Retweet. I haven’t met many people younger than 30 working in office.
My bank increased the number of days we're required to be in the office from 3 to 4, but its not being enforced
My firm = 3x per week without proactive enforcement. I know one large multi-class manager similar to us has a rough 3x policy (some people do 2, some 3, others 4 - no mandate). I know BGO is now back to 4 days. Lifecos in my city seem to be around 3x.
My two cents is that it’s all about control. Boomer CEOs fear the unknown. I’m going to sound like a commie here but the last 5 years have convinced me of this. In person collaboration is dependent on culture and I don’t think it’s necessary to be in an office 5x per week to work effectively.
Those people we fear are slacking off at home? Guess what, they’re slacking off in the office too. Just because they sit there looking busy doesn’t mean they’re productive. I have seen this time and again at our shop over five years. The people who are productive are productive regardless of where they sit.
I am told that we need to be in the office for “those dynamic and unplanned conversations” that stem from in person collaboration yet people stay in their cubes and offices without talking and often don’t like being bothered if you do try to talk to them. It’s quiet as a library here.
Not trying to stir the pot but I like having more of my life back. The entire fabric of American commuter life for the middle class - those of us who can’t afford downtown homes - is better when we aren’t in cars and on trains for 3 hours a day. Just my two cents.
Spot on. I am a productive person overall, but I have my relatively productive and less productive days both at home and in office, and in fact some of the least productive days in terms of output were a direct result of being in the office with chatty coworkers that both directly spark conversations despite my nonverbal cues that I am trying to buckle down and also are on the phone loudly right next to me. There's no question being in office is valuable for young professionals or when you're new to an organization to pick up on all the work-relevant conversations that happen organically.
Echoing your point, whether I am in the office or at home, if I have a pressing personal matter or errand to run at lunch, I am generally going to work it into my day regardless if I'm in the office or not. There are elements to both WFH and office that promote productivity and detract from it IF you are not disciplined and motivated yourself. However, there is so much more you can accomplish in your day without a big commute, getting ready, etc., and even without those obvious benefits of WFH I really appreciate variety throughout the week for the sake of it, so I just don't understand how anyone could be against hybrid work models once you understand all of this.
It really seems like it is just a matter of execs needing to be in office for their positions regardless so they don't have personal incentives to give WFH/hybrid as fair of a shake, excluding satisfying the growing percentage of their workforce from younger generations... which 100% will steady the tides and let hybrid work remain fairly mainstream in the long run.
EDIT: forgot to add, New Yorkers probably are more indifferent re: WFH given how small their homes are. Not very conducive to having a comfortable office setup. That laptop + monitor(s) living room/kitchen setup gets old quickly.
I think the second part of this is correct. Productive people are productive anywhere.
However, the slackers in the office are even bigger slackers at home.
And management should be able to tell when excessive slacking occurs without micromanaging. You've got a problem when you need office presence/proximity to get productivity out of a person.
I don't think you need to stay away from office forever but it's definitely going to be in a tough spot for at minimum a few more years. Companies are still figuring out their long-term space needs and there's a massive flight to quality. It'll be a long time before things fully shake out.
In my view, hybrid is never going to go away fully. I think most front office roles are going to settle at 4 days a week, back office will be 3. Employees, and employers, have seen the benefits of the flexibility of having 1-2 days a week where you're allowed to go remote, there's no putting that back in Pandora's box. In Canada even the two most buttoned up, old school Wall Street-style shops have backtracked on their post-COVID drumbeating for mandatory 5 days a week once they realized they couldn't retain any back office talent and are now Fridays WFH.
Totally culture dependant
Yes and no, depends on the industry
It is entirely culture dependent, but I have noticed that all of the younger high achievers in my firm tend to almost exclusively do work-from-home. No knock on the guys who prefer in office work (I even insist on in-office meetings in certain cases), but high performers tend to be able to work way more efficiently without having to deal with distractions.
A lot of the younger analysts at our firm insist on work-from-home, and the data backs it up. Our productivity has actually sky-rocketed since work-from home was allowed. It seems that most people just need hard data to back up the WFM argument, otherwise old heads get caught in pre-existing beliefs that don’t really match the times.
if you spend most of your day in excel and on the phone, you really don’t need to be in the office outside of specific circumstances.
Not sure that makes sense in all cases. But maybe you company is good at keeping people in the loop. Also, you don't want analyst getting to VP without people skills, how can you hone that in WFH, you can't.
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