Office Development is Booming, But Evolving

May 26, 2022 | Industry Trends, Insights

By Scott Evans, Director of Business Development  

When I was younger and just starting out in my career as an architect, I think I learned the most sitting in my cubicle listening to older colleagues on the phone. I paid close attention to how they handled conflict, how they communicated with clients, or how they resolved issues with general contractors. I am grateful I had the opportunity to start out in an office setting, surrounded by more experienced people who had a lot to teach a young guy like me. I’m still a fan of working in a collaborative office setting. There are some colleagues who might argue they are more productive working from home, or some who would prefer a hybrid schedule. It’s only been two years since the pandemic began and most of us are still trying to figure out what works best for us in terms of the how and where we work. While employees are considering their options, employers are also trying to figure out what system appeals most to retain and recruit employees. What does the ideal office look like in 2022? How much or little square footage do companies need? To keep up with the evolving needs of employees, employers and developers are building new office space or adapting existing space. Here’s some of the biggest evolutions we’re seeing in modern office development:  

1. Cutting Out Conference Space 

Several years ago, a traditional office building for a larger company would feature a grand lobby entrance with multiple, large conference rooms on each floor. What we’re seeing now in newer projects is a reduction in the number of large board rooms and conference rooms. There’s a push for smaller, collaborative meeting spaces and huddle rooms. Many companies are opting to go off site for large meetings or use large amenity spaces provided on-site by their current building owner in lieu of designing that conference space into their tenant spaces.  

 2. Offices Aren’t Enough 

We’ve all heard by now about The Great Resignation of 2021. Companies who can’t offer flexibility and supportive workspaces aren’t going to retain employees and they certainly aren’t going to attract top recruits coming out of college. How do you make your office environment stand out from the crowd? Amenities. Office buildings need to provide more opportunities for employees to recharge and refocus than traditional workspaces or even their homes. We’re seeing an increase in green spaces, roof decks, fitness centers, even the addition of coffee shops or convenience-retail options so employees can run errands on breaks.  

 3. Location is an Asset 

Both amenities and large conference rooms can add expense to a project and requires more square footage. Some companies are building or finding smaller office spaces in more developed, urban locations that have hotels, conference centers, restaurants, and amenities for offsite meetings and employee entertainment all within walking distance. A great location allows employers to offer attractive features without building them into their project.  

 4. Building in Flexibility 

Hoteling is a bit of a buzzword in the corporate world right now. The concept eliminates assigned seating or designated offices and allows employees to come into the office or work from home on their own schedule. While not an entirely new idea, it is becoming more widespread among offices as employees are eager to have more flexibility in their work schedule. It’s hard for companies to know exactly how many designated offices they should build or how many unassigned workstations on a new project. It takes time to study what office flow and employee schedules work best for a company. What we’re seeing now is a push to build flexibility into these spaces. Give offices the ability to be turned into meeting rooms, if necessary, while also building space for hoteling stations that could be reconfigured into cubicles or dedicated workspaces. Essentially giving companies the ability to morph their offices to fit their needs as they continue to evolve.  

 There is about 24% vacancy of office space available for lease in just the greater Houston area. Developers see that tenants are looking for newer, fresher buildings and are working to meet those demands. There’s also an opportunity to take the Class B office space companies are leaving behind and repositioning the dead space into amenity space like converting a top floor to a roof deck or redeveloping an entire floor of offices into a fitness center. Those grandiose first floor, marble lobbies? They are prime real estate for street-activated amenities like retail and restaurants. Right now, being able to put appealing, modern office space on the market is a solid investment opportunity as companies are searching for new spaces to keep and recruit top-tier employees.  

 

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