According to a recent article by Richard Carr of National Real Estate Investor, there is “growing preference for open spaces over traditional offices, efficiency over expansion, secondary markets over class-A buildings in primary cities and, in some markets, a new trend of preferring low-rise buildings or lower floors in high-rise buildings to higher-priced floors at the top.”
UrbanLand, the official magazine of the Urban Land Institute (ULI), also recently explored the ways in which office spaces are evolving. During a recent ULI panelist discussion, CRE experts discussed trends in design, work styles based on generations and more efficient use of office space. Key take-a-ways included:
- Collaboration is important, which means getting rid of private offices and moving to a much more flexible and fluid work environment.
- For the Millennials and members of Generation Y, flexibility and adaptability are the gold standard. They prefer to work wherever and whenever they want. Gen Ys crave community. They share cars; they share tools; they share skills; and they are happy to share office space. They’re looking for the ability to pick and choose how much stimulation they want in the workspace.
- The square footage per person has dropped over the last five years and is predicted to drop as low as 100 square feet [9 sq m] per person by 2017. It was also found that for every two square feet that is dropped, square footage is added back in terms of amenity spaces (boardrooms, corporate gyms, etc.).
- There can be consequences to densifying the work environment. Chief among them are heavier load on elevators and having realistic parking ratios. For investors, it will be important to be aware of the additional challenges of densification before working to attractive space-efficient tenants.
- Executives at every level are making real estate decisions based on issues of health and wellness, and lease rates will be affected by these decisions. New office developments for big tech clients are, and will continue to be, non-starters if they don’t consider sustainability, health, walkability and access to public transit, bikeways, and walking trails.
- Landlords are not selling space. They’re selling productivity. The more productive a space is, the higher rents they can obtain per square foot.
With renewed demand for office space, many investors are looking to sell their property to obtain the highest return on their investment. Over the last year, the team at Commercial Defeasance has educated many office owners on the defeasance process.
Defeasance is complicated, which is why our team proactively manages each step of the process. If you want to Defease With Ease® give us a call, and we will facilitate your next defeasance.