Real Estate Focus – There is an office space revolution in progress

Originally published June 2, 2014 in The Enterprise, www.slenterprise.com

There are a number of extremely successful companies who have broken the mold. These companies lead by knowing how their workforce is changing and what office environments will be best suited to their company’s culture and their employees. This revolution is now being picked up by more mainstream companies. What is this revolution and what impact will it have on the design and construction of new office space?

Collaboration is the name of the game for up and coming young entrepreneurs and executives. The teamwork-partnership-cooperative-group effort mentality is beginning to permeate how more traditional businesses are run and grown. This change in attitude is being reflected not only in the way a company is run, but also where a company chooses to do business.

Businesses that have been more traditional are making shifts in management style and techniques, adopting new ideas to meet the needs of their younger employees. This is also having a major impact on the type of office space young (and even many forward-thinking established) companies are looking for.

Is this a business thing or a generational thing? Both. It’s a generational attitude that is impacting business. Recent studies suggest that Gen Y employees rate an engaging workplace as a highly important factor, while their need for quality and quantity of meeting rooms is ranked at the bottom. Baby Boomers on the other hand see the exact opposite. They want more formal, face-to-face meetings so the conference room setting is important.

To Boomers, the corner office — literally a physical office in the corner of a building — is a goal. It is seen as a reward for success. To Gen Y, working in a cool building, with cool amenities, in a comfortable and energetic environment is the motivating factor. In fact, many young employees rank a great workspace as more important than a higher pay rate. Some of the amenities they value include wow factors such as basketball courts and rock climbing walls or dedicated game rooms for pool tables, big-screen TVs and game consoles.

As architecture evolves to meet this perspective, many companies with multi-generational workforces are sometimes left scratching their heads on how to meet the changing needs of their workforce and business. The current trend is to center on environmental elements. We’re seeing businesses, including law firms, designing their spaces to put more people into fewer square feet. This necessitates smaller, yet more efficient personal offices. These smaller offices are balanced by other elements.

While offices are getting smaller, every employee still needs a place to park his or her car or access to mass transit. Whether a company has 10 or 1,000 employees, parking ratio is a critical consideration for real estate decisions. As the economy continues to grow and employee count goes up, a side effect will be that there are fewer parking spaces available, which increases the importance of nearby mass transit. Improved mass transit in recent years has given new life to downtown areas, with employees and companies loving the dynamic environment that urban offices can offer.

As priorities have changed, the way an office looks has changed as well. Traditional offices were known for having their egos on the outside — large buildings, big signs, with expensive cars parked outside. The Gen Y attitude is to keep the office space low key and load it with desired features like natural light. Big signs are being replaced with big windows and authoritarian offices are replaced with large collaboration spaces. No more cube farms — there are still cubicles, but they are often relegated to the perimeter of the room which allows for an open space in the middle.
The open feel of a space is often extended to the ceiling as well — panels are being ripped out to expose the rafters and ventilation system. This has a tendency to create an atmosphere of volume and an industrious (not necessarily industrial) feeling. Add a few bean bag chairs, a comfy couch, and espresso machine, and the best-places-to-work vibe skyrockets.

Building owners are clueing in to the fact that amenities are important. They are getting creative in what they can offer smaller tenants who may not have the capital to install a private squash court or other feature. Some buildings are providing amenities such as onsite gyms, locker rooms and restaurants for multiple tenants to share.

As the workforce evolves and priorities change, the architecture and design of office space will continue to change as well. Smart executives can start taking cues from cutting edge companies as to what the changing needs of their workforce will entail.

Dana Baird and Mike Richmond are Executive Directors of Cushman & Wakefield | Commerce, a commercial real estate brokerage based in Salt Lake City. They can be reached at dbaird@comre.com and mrichmond@comre.com.

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