Back to the office... here we go again!

If there is one topic polarizing businesses these days, it is the return of employees to the office three, four or even five days a week. This is a directive increasingly being prescribed by the leaders of large organizations.

Five years after remote working took root throughout the western world (courtesy of Covid-19), Amazon, JP Morgan, Google, Microsoft, Starbucks and even Canadian banks RBC, Scotiabank and BMO are now requiring their employees to spend more time in the office.

The Ontario government has also decreed a return to the office for provincial civil servants five days a week, starting next January. This policy also applies to affiliated organizations.

We at Avison Young are following suit. Since mid-September, we have been asking our 85 employees to return to the office five days a week, rather than three.

The real estate market is feeling the impact

Our brokers are feeling this trend strongly these days. For the first time since 2019, the Greater Montreal commercial real estate market is experiencing positive absorption. According to them, the return to the office is leading to a tightening of space in buildings, particularly Class A buildings in the city centre. As proof, from June 2024 to June 2025, the availability rate for this type of building fell from 19.6 percent to 17.6 percent.

And because the hybrid formula of one to three days a week seems to be being questioned by several companies, particularly those in the financial sector, there is every reason to believe that this decline in availability will continue in the coming months. Since the beginning of the year, the percentage of total available space offered for sublease has fallen by six percent for the prestige category and 2.4 percent for the Class A category.

In fact, these decreases in rental options are largely due to limited new supply and the conversion or demolition of part of the inventory, especially in the city centre.

An active market

With the rental market picking up steam and borrowing rates improving, investors are also returning. Until recently, real estate transactions involving office towers were limited to underperforming assets acquired below replacement cost for the purpose of repositioning or densification.

However, the sale of 1200 McGill College and the arrival of the Deloitte Tower on the transaction market are sending a completely different signal. 1200 McGill College, acquired by KingsettCapital for $100.65 million ($286/square foot) even marks a return of institutional funds to the market. In fact, over the past year, the value of transactions involving office space has climbed by nearly 50 percent.

Local private players are also active, as evidenced by investor Luc Poirier's $72 million acquisition of the Place Laval complex. In short, several downtown buildings, totalling more than 3.4 million square feet of office space, are also for sale or about to change hands. All of this activity shows that commercial real estate investors are also anticipating a strong trend toward a return to the office.

Why such a decision?

Despite all the advantages of digital technology, it is clear that it is impossible to transmit a company's culture through a screen.

Many executives believe that a shared work environment remains the best place to properly train and motivate team members. It is within the company that new recruits can best learn about processes, ways of doing things, the vision and, above all, the culture of the company.

It is also within the company that recruits can learn more about who their best allies and mentors are in order to advance within their industry. It is also within a shared work environment that spontaneous discussions in the elevator and the development of professional relationships between colleagues take place.

It is also easier to instill a sense of responsibility in each member of your team within a company setting. At a time when the economy is becoming more competitive, and the productivity and efficiency of each team member is becoming essential to the smooth running of the company, it is easier to manage workflows and accountability when everyone is in the same place.


 

A colossal task

The task will not be easy. People have tasted the benefits of teleworking. No morning and evening commute; no dress code to follow; the opportunity to take care of daily household tasks between Teams meetings... Returning to the office is likely to disrupt the daily lives of many employees.

Some will have to rearrange their daily schedules, particularly parents with young children or those who are caregivers. Some employees may even have moved away from major urban centres, putting them further away from their workplace. There is also the issue of Generation Z employees. Some of them may have completed their degrees remotely and therefore have never experienced full-time office life.

This is why it is important to create a dynamic and motivating environment to facilitate the return to the office.

A clear policy for everyone

However, the return to the office must be accompanied by a clear policy that applies to all employees. If the company wants everyone to buy in, the message cannot be directed solely at subordinates. All members of management must also be present at work in the same way as their employees. This is a prerequisite.

Nor can this policy be implemented overnight. At our Montreal office, we have been preparing our staff for this return to the office since the beginning of the summer. For several weeks now, the management team and I have been sharing our vision with our various teams.

It is important to fully understand the potential impact such a directive will have on the entire workforce. What do employees expect? What will they need to be able to return to the office? What would make their transition easier?

In fact, as leaders, we need to make sure that teams feel involved in the decision. We need to be able to communicate openly and honestly about why this transition is part of the company's long-term vision and why it is important to work under one roof. That is the key.

Winning conditions

There is no magic formula for a successful return to the office. Every company is different, each with its own space requirements specific to its business activities. However, as real estate experts, we remain convinced that certain initiatives can facilitate the process.

One of them is to ensure that the office space truly offers the benefits of teamwork, rather than an environment where individual Zoom meetings continue. Even before the pandemic, many of our clients were beginning to increase the number of meeting rooms and coffee areas to encourage collaboration and spontaneous exchanges. This type of environment makes even more sense today.

Filling the calendar with training sessions, collaborative activities, team-building sessions, lunch conferences and other career-boosting activities is also one of the benefits that we should promote to encourage a return to the office. Our teams are already seeing in the field that several downtown property managers are getting involved and want to improve the experience within their buildings. Some are organizing yoga breaks, barbecues and other types of activities. More and more managers are enhancing their buildings with services such as concierge services, conference centres, temporary office rentals, meeting spaces, parcel reception services, etc. These are initiatives that were rarely, if ever, seen before the pandemic in terms of tenant services.

Modern and flexible spaces

Several companies have also taken advantage of the pandemic to review and modernize their spaces in order to make their working environment more pleasant and stimulating. These new layouts increase the chances of gaining employee buy-in. We see this among our clients and business partners who have invested in revitalizing their workplaces. The return to the office is well underway.

We, too, have prepared for a possible return to the office. We have moved. Two years ago, we left our former premises on René-Lévesque Boulevard and moved to 1801 McGill College Avenue.

We have noticed that companies, and especially their employees, appreciate flexible spaces and amenities that promote their well-being. In fact, more and more buildings in the city centre are offering gyms, lockers for employees to store their bicycles, showers, and even event spaces, including outdoor terraces.

Better to be proactive

Finally, regardless of the positions of companies and employees on returning to the office, this movement is well and truly underway...and it already promises a lot of action in commercial real estate in the coming months. In fact, if the current trend continues, companies that want to make a successful return to the office will have to be proactive. Especially if they want to benefit from the best spaces available.
 

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