The dust isn’t settling — on friction, flow, and the new operating logic for commercial real estate
The game has changed, and so has the stadium
An awkward question, still unanswered
For most of my career as a surveyor I have asked one awkward question: what is the office actually for? Not what it contains, not how it is measured, not what it costs per square foot — but what purpose it genuinely serves for the people inside it and the organisations that pay for it. It is a question the industry has been reluctant to answer directly. And here we are in 2026, still avoiding it.
The debate that fills our conferences and our feeds reduces everything to a binary: back to the office, or work from home. Both sides are missing what is actually happening. And now a third force has entered the room — the rapid acceleration of artificial intelligence is reshaping not just where work happens but what work is, who does it, and how much of it requires human presence at all. Rather than resolving the debate, AI has deepened it. This is not a pendulum that will swing back. It is not a phase to be managed until normality returns. It is something structurally different — and understanding it requires a different kind of thinking.
Over a decade ago I argued that commercial real estate was approaching an inflection point. The response, for the most part, was to carry on as before. Covid changed that — not by creating the transformation, but by making it impossible to ignore. What the pandemic exposed had been quietly building for twenty years, fired by cloud computing and the smartphone, long before anyone had heard of a furlough scheme.
The term I reach for is not paradigm shift. That phrase — borrowed from the history of scientific revolutions — implies rupture: one world replaced by another in a clean break. That is not what we are living through. Ours is quieter, more continuous, more layered. The concept I find more precise comes from fluid dynamics: laminar flow.
I came across it by accident — a chance encounter with physics that turned out to illuminate commercial real estate more clearly than most property theory I have read. Laminar flow describes parallel layers of fluid moving in the same direction, each at its own pace. For a time they coexist smoothly. But friction builds at the boundaries, and when the speed differential becomes great enough, the old pattern destabilises and a new configuration takes over. That is the precise shape of what is happening in CRE today.
The laminar framework helps make sense of how multiple shifts — analogue to digital, fixed to fluid, owned to subscribed — interact within a single system of change rather than arriving as separate shocks. And it surfaces three friction zones where the old order and the new are in direct, daily conflict: lease structures, workplace design, and value measurement. It is these three zones, and what they demand of us, that this essay sets out to examine.
The world didn’t reset. It layered.
There is a reason the paradigm shift metaphor has worn thin. We have been promised rupture — a clean before and after — and instead we got something messier, slower, and in many ways more disorienting. The world did not reset. It layered.
In fluid dynamics, laminar flow describes what happens when a fluid moves in parallel streams, each layer travelling at its own velocity without turbulence disturbing the whole. The layers coexist. They appear stable. But they are not static — differential velocities generate friction at the boundaries, and when that friction reaches a threshold, the smooth parallel structure breaks down and a new configuration emerges.
This is the better description of commercial real estate in 2026. Not a revolution. Not a return to normal. A system in which two distinct layers are moving simultaneously — one still defined by the logic of ownership, long leases, and static assets; the other accelerating toward platforms, adaptive experience, and demand that reshapes itself faster than any lease cycle can accommodate. The layers have coexisted uneasily since the smartphone put a flexible working tool in every pocket and cloud computing untethered data from the desk. Covid did not create this dynamic. It compressed it — forcing a speed differential that had been quietly building for two decades into plain sight within a matter of months.
This matters because it changes what kind of problem we are trying to solve. A paradigm shift is an event — something that happens, and then is over, and then must be managed. A laminar transition is a condition — an ongoing state of structured tension between layers moving at different speeds. The organisations and advisers waiting for the dust to settle are misreading the situation. The messy middle is not a phase. It is the operating environment.
What the laminar frame offers is not comfort but clarity. It tells us where to look: not at the layers themselves, but at the boundaries between them. Those boundaries have three distinct faces.
Friction at the boundary
If the laminar frame tells us where to look, the three friction zones tell us what we find there. Each represents a boundary where the old layer and the new are in direct, daily conflict. Each has been visible for years. What has changed is the cost of ignoring them.
Leasing logic
The foundational contract of commercial real estate is a ten-year lease. The foundational contract of the modern organisation is a three-to-six month product cycle. These two rhythms are not just misaligned — they are structurally incompatible. The tenant who signed for a floor of dedicated desks in 2019 is now managing a workforce that, according to a March 2026 report by Remit Consulting, uses that floor at around forty percent occupancy on a good day. The landlord capitalised for certainty is facing an occupier market that prices optionality above almost everything else.
I wrote about the landlord-tenant relationship as an Odd Couple in my books — two parties who need each other but whose operating logics have grown so different that cohabitation has become genuinely strained. That strain is no longer theoretical. It shows up in lease negotiations, in break clause disputes, in the proliferation of flex and serviced office provision that is itself a symptom of a market trying to route around a leasing model it has outgrown. The lease has not yet broken. But it is bending in ways the standard form was never designed to absorb.
Workplace design
Buildings were built for presence. Workforces have been rebuilt around choice. The gap between those two facts is where the concept of the toxic office lives — not a dramatic pathology but a quiet, persistent mismatch between what a space asks of its occupants and what those occupants now know is possible elsewhere.
Caroline Waters OBE, then HR Director at BT, put the underlying principle with memorable precision: the only purpose of space is to help the performance of the business. It sounds obvious. It is, in practice, radical — because most of the office stock inherited from the last thirty years was designed around headcount assumptions, floor plate efficiency, and the presumption of daily presence. Strip those assumptions away and much of what we built is revealed as optimised for a model of work that no longer exists.
The response from some landlords and occupiers has been to reach for cosmetic interventions dressed up as workplace strategy. The issue is not that offices lack amenity. It is that the fundamental relationship between space and work has changed, and no surface-level upgrade closes that gap.
Value measurement
The third friction zone is perhaps the most consequential, because it governs how decisions get made at every level of the market. Square footage remains the dominant unit of account in CRE — the metric by which space is priced, portfolios are reported, and performance is assessed. But square footage measures supply, not value. And the occupier is no longer buying supply.
Denis McGowen, formerly at Standard Chartered, captured the new calculus precisely: twice the experience, half the space. It is not a slogan. It is a description of what a sophisticated occupier is actually optimising for — and it cannot be expressed in square feet. Experience, capability, belonging, carbon performance: these are the dimensions on which space is now being evaluated. The instrument panel of CRE has not kept pace with what the market is actually measuring.
These three zones are not separate crises. They are expressions of the same underlying tension — the laminar boundary between a layer that still runs on 20th-century logic and a layer that has already moved on.
From diagnosis to operating model
Diagnosing friction is necessary. It is not sufficient. The harder question is what a CRE logic fit for a laminar world actually looks like.
The answer rests on three connected shifts. Buildings must behave like platforms, not products — enabling environments that create the conditions for others to generate value, rather than simply containing them. Space must be responsive, not prescriptive — serving the fixed-flex-fluid reality of how knowledge work actually happens. And value must be measured against a richer ledger: human capital, community impact, carbon performance, operational flexibility, and financial return, not reduced to a single metric that captures supply but not experience.
The deeper error behind all three friction zones is the same one. People and place are not separate problems. They are two sides of the same coin, and the organisations that grasp this — designing for the human experience of place rather than the floor plate and the lease schedule — are the ones already operating in the new layer.
What has made this difficult to act on is how deeply the office-as-default was rooted in industrial-age assumptions. The five-day, nine-to-five week was not a natural law. It was an organisational convention inherited from factory floors and typing pools, imported into knowledge work without ever being seriously interrogated. I first encountered Frank Duffy’s thinking on this during my time at Disney in the late 1990s, and it has stayed with me ever since. Duffy, whose work at DEGW shaped workplace strategy for four decades, had identified the central tension long before the pandemic forced the industry to confront it: patterns of work had been changing faster than the shape of buildings could accommodate. What struck me then, and strikes me still, is how little had changed in the intervening decades. The pandemic finally made the interrogation unavoidable.
None of this is untested. The BBC estate transformation, the creation of MediaCityUK, the reinvention of Television Centre as a £3 billion innovation quarter — these were not property transactions. They were demonstrations, at scale and over time, that a different logic works. That belonging and identity are hard strategic levers, not soft ones. That the built environment is not a cost centre but a cultural engine. And that every property move, handled well, is a business transformation opportunity — never merely a lift and shift. The Smart Value formula that emerged from that work — Land plus Brand equals greater Value — was not a property equation. It was a platform equation, asking what a place could enable rather than simply what it could contain.
The future is not inevitable
The laminar world is not a problem to be solved. It is a condition to be understood and, for those willing to engage with it seriously, an opportunity to be shaped.
That opportunity has a clear shape: buildings as platforms, space as a responsive spectrum, value measured in experience as well as square footage, and leadership operating from genuine convergence across CRE, HR, IT, and the C-suite. Charles Handy put the underlying challenge with characteristic precision — and I speak from personal experience of his thinking. In 2015 he invited me for breakfast at his home in Putney to review the proposal for what became Where is My Office? His verdict was generous but direct. Real estate people, he observed, tend to live in their own bubble, assuming that big is better and that conformity and regularity are virtues — but all of these, he said, are the enemies of creativity. The real challenge, as he framed it, was how to design the workplace for creativity and human engagement. That question has guided my thinking ever since. His conclusion then, as now, holds: the future is not inevitable. We can influence it, if we know what we want it to be. That is not a consolation. It is a brief.
What I am calling for is a Coalition of the Convinced — not a lobbying group or a conference theme, but a genuine collaborative endeavour across sectors, disciplines, and silos. CRE professionals willing to argue the case for platform thinking in boardrooms still counting desks. HR leaders prepared to treat place as a strategic variable rather than a facilities question. Policymakers ready to align planning and incentive structures with the distributed model of work that is already here. And the people who actually use these spaces — whose experience is the only honest measure of whether any of this is working.
The question I have been asking for most of my career — what is the office actually for? — now has a sharper edge than ever, because the cost of not answering it is visible in every underused floor plate, every toxic office, every lease negotiation conducted in the wrong currency. The answer begins with accepting that 20th-century thinking will not solve 21st-century problems. And it continues with the kind of fresh approach that the laminar world not only demands but, for those willing to see it clearly, makes genuinely possible.
Chris Kane is the author of Where is My Office? (Bloomsbury, 2020 & 2023), provides advice at Chris Kane Associates, and former Head of Corporate Real Estate at the BBC. He writes at People & Places on Substack.