Vornado Realty Trust: Leading the Way in Hybrid Work and Office Landlord Services

**Employees vs Commercial Real Estate Giants: The Rise of the Hybrid Working Model**

**New York Landlord Embraces the Hybrid Working Model**

New York-based real estate giant Vornado Realty Trust, one of the city’s largest office landlords, has made a significant shift in response to the growing popularity of the hybrid working model. The company’s chairman, Steven Roth, has declared that Fridays in the office are now “dead forever.” Instead, Vornado is focusing on making its office locations as accessible and enjoyable as possible for commuters.

Roth recognizes that not only are Fridays in the office a thing of the past, but even Mondays are touch-and-go. In an interview with the Wall Street Journal, he revealed his belief that employees will be more likely to commute into major hubs in the middle of the week if their journeys are easy. As a result, Vornado is prioritizing a “one-seat commute” for its employees. This means that employees should not have to use the subway to get to their offices. They can either walk, given the proximity to major transport hubs, or use underground entrances that directly connect the buildings to the transportation network.

This approach represents a substantial investment for Vornado, which has already spent $1.2 billion renovating two of its offices in Manhattan’s Penn Station area. However, Roth’s billion-dollar gamble is supported by data from Kastle Systems, a security provider for 2,600 buildings across 138 U.S. cities. According to Kastle’s weekly analysis, the average office occupancy level in the top 10 U.S. cities stands at 49.8%. In New York and San Francisco, the occupancy rates are even higher at 50% and 45% respectively. Kastle also found that offices are busiest on Tuesdays, followed by Wednesdays and Thursdays.

Although the number of workers physically present in the office has declined since February 2020, the most recent data from May 2023 shows an increase of up to 10% in the number of commuters, particularly on Tuesdays and Wednesdays.

**Employers’ Response to the Hybrid Working Model**

Vornado’s approach of improving office facilities to attract employees back to the workplace is echoed by other companies. One prominent example is Google, which initially offered a more lenient approach to returning to the office with a desk-sharing policy. However, the tech giant recently implemented a mandatory return to the office policy. Google’s chief people officer, Fiona Cicconi, informed employees that they must be in the office three days a week or risk their attendance negatively impacting their performance reviews. The company highlighted that remote work would now only be allowed “by exception only.” This decision was based on the belief that a hybrid approach combining in-person and remote work offers the best of both worlds.

Meta, the company formerly known as Facebook, has also adopted a three-day office presence policy. However, Meta emphasized its commitment to continuously refining its model to foster collaboration, relationships, and culture among employees.

The return to the office is justified not only by the significant financial investment in office spaces but also by the potential benefits for individuals’ careers and teamwork. Studies have shown that working in the office can enhance career prospects and facilitate better collaboration.

**Employee Resistance and the Need for Flexibility**

Despite the push from employers to return to the office, employees are determined to retain the freedoms they enjoyed during the pandemic. A study by McKinsey & Company revealed that over 60% of U.S. workers expressed their desire to work remotely at least three days a week. Many workers indicated that they would consider leaving their current jobs if this option was not available.

Furthermore, employees who are not in favor of hybrid work models will likely find various potential employers who have embraced a more relaxed approach. According to a recent survey by the International Foundation of Employee Benefit Plans, 74% of companies now have a hybrid work model.

**Conclusion**

The battle between employees and commercial real estate giants rages on as the popularity of the hybrid working model grows. Vornado Realty Trust’s decision to declare Fridays in the office as “dead forever” and focus on improving office accessibility demonstrates a shift in the real estate industry. Other companies, such as Google and Meta, have implemented mandatory return-to-office policies, albeit with some flexibility. As employees voice their preferences for remote work, it is essential for employers to strike a balance that accommodates their needs while fostering collaboration and maintaining productivity.