The workplace evolves as tenants enhance office spaces to compete for workers.
Office development and workplace design experts discuss the influences of high-tech companies’ preference for “cool” spaces, younger workers’ desire for collaborative and flexible work environments, the shrinking of individual workspaces and increase in amenities, and the future of the office.
What trends are shaping the workplace?
Jo Staffelbach Heinz: The overarching trends relate to greater flexibility and the need for variety and choices in the workplace. There is a greater sensitivity to accommodating different types of work styles. Environmental awareness and sustainability are also big. More companies are focusing on providing high-quality lighting and openness. Collaboration is important, which means getting rid of private offices and moving to a much more flexible and fluid work environment.
Todd Sklar: There is a growing market for what we refer to as creative office space. Market Square in San Francisco would be an example. Originally a furniture warehouse, it was renovated into office space. Twitter leased a significant amount of square footage there for its headquarters. A lot of tech companies would like to have this kind of space—space that feels less generic and more authentic, that has some historic quality, or that was originally built for a different use. Adaptive use of older buildings isn’t new, of course, but it used to be a much smaller market limited to architects, engineers, and advertising firms. Now tech companies and media production companies are also looking for these spaces.
Matt Pullen: At Cushman & Wakefield here in Boston, we recently relocated our office. Our group had been spread across two-and-a-half floors, so we were very focused on finding a work environment that brought the firm together as a whole. We were looking to create more collaborative space. That seems to be a major concern with all types of tenants, so that can mean creating small gathering areas. The lunchroom is the easiest place to get people to run into each other, but any space will do the job if it’s comfortable and easy for people to meet on an ad hoc basis. Since we moved in [last] June, people who had been working here for ten years but had never met now are getting the chance to know each other. Once we had a lunchroom that was big enough for everyone to sit down, all of a sudden you find yourself talking to people about matters that you never had the opportunity to discuss before.
Joe Gorin: The trend toward a more collaborative workplace started with technology and creative companies, and now we’re seeing even more tenants embrace that. They are hiring a younger generation that has been used to working in a collaborative environment ever since they were in school. Also, the unemployment rate for white-collar office workers is extremely low. So the real estate becomes almost a recruiting tool because these millennial workers, who are primarily in the tech workforce but also moving into other industries, have choices. They want to be in a live/work/play environment. So office owners either have to have the right kind of office or create the right kind of office for these tenants. A lot of these real estate decisions are decided by the human resources department as much as by the senior executives. The corner-office hierarchy is not as valued today. People want open layouts that emphasize collaboration and communication.
How are companies accommodating the work styles of different generations?
Carl Meyer: 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 are part of what we call the sharing economy. They share cars; they share tools; they share skills; and they are happy to share office space as well. They’re looking for the ability to pick and choose how much stimulation they want in the workspace. So you might need a coffee bar, long rows of workstations, open collaboration spaces, two-person rooms, touch-down work areas, conference rooms, and “war rooms.” Of course, you still have executive offices and the bigger conference rooms and six-person meeting rooms.
Heinz: Generation Y has transformed the workplace. They are not afraid to challenge the status quo; they are very independent and tech savvy; and they are focused on getting the right technology. They can operate almost anywhere, work anywhere, anytime. And for them, work/life balance is critical. They will leave a job if they are asked to work all night. And that has really challenged the older generations, who are used to working whenever to get the job done. When you put the traditionalists, the baby boomers, gen X, gen Y, and the millennials together, the workplace has to offer a variety of spaces where everyone can work differently.
Pullen: The current economic recovery, in many cases, has been a tech-driven recovery. The technology, biotechnology, and life sciences are big components of the current health of the premier office market in Boston, and those industries are hiring millennials. But the underlying base of Boston tenants is still law firms and financial institutions. So as a property owner, how do you redefine or re-create a building that embraces the millennials and has collaborative office space that is cool and hip but at the same time doesn’t drive off your bread-and-butter tenants, those law firms and financial institutions?
How is the drive for more efficient use of real estate changing office space?
Meyer: The square footage per person has dropped over the last five years. Nationally, the average square feet per worker went from 225 to 176 [20 to 16 sq m] between 2010 and 2012, and that number is predicted to drop as low as 100 square feet [9 sq m] per person by 2017. But for every two square feet that we drop, we really have to add a square foot back in terms of amenity spaces.
Sklar: Creative firms tend to look for larger floor plates than an accounting or law firm would, and they commonly allocate less individual workspace per employee—in some cases much smaller than a conventional workspace in a cubicle layout. However, they tend to offer much more in the way of amenities. So the size and quality of dining space goes up, and there might be yoga rooms, beer on tap. Twitter has a 20,000-square-foot [1,900 sq m] roof garden at Market Square. On some of our other projects, where the climate permits, we are providing outdoor amenities at ground level, trying to meet the need for this market which, not coincidentally, has a much younger demographic. In a few cases, tenants want to have fewer square feet per person but not provide the extra amenities. I don’t know how successful that can be. It’s not as though you can have bunk desks and have people stacked three high working in the same space.
Gorin: There are consequences to densifying the work environment. There is a heavier load on elevators and parking, especially in the suburbs. So for those thinking of investing in or purchasing buildings or repositioning assets to be more tech friendly, they have to be aware of the additional challenges of densification. They might have to modernize existing elevators so they can accommodate the heavier requirements, and they will need to be realistic about what parking ratios they need in order to be attractive to some of these more space-efficient tenants.
Heinz: For the office to be more efficient requires a very calculated use of the space. All spaces need to be multifunctional. A conference room has to be able to convert to a training room and a videoconferencing room. Rooms need to be able to open into one another to create larger or smaller spaces. And more spaces are being used for longer—early in the morning until late at night, and even into the evening. They have to be able to handle different types of presentations. So the acoustics, audiovisual capabilities, the quality of light—all of these make a huge difference.
What other factors are influencing office spaces?
Gorin: In the old days, when considering acquisitions I always used to look for buildings with a relatively square or rectangular floor plan with a center core, and probably at least 40 feet [12 m] from the elevator core on all sides. That’s becoming something of an antiquated floor plate. Now, you don’t need the most efficient center-core building because these tenants are embracing depth in the floor plate, as long as you can provide enough natural light. Some less conventionally shaped floor plates—triangles, trapezoids—are attractive to tech tenants as long as they provide the right depth and the cool factor. That might mean old brick-and-beam buildings with some soul and character have a more attractive floor plate than a traditional building where the focus was on fitting in so many perimeter offices per square feet.
Sklar: The role of food in the workplace is becoming more important. Some companies offer large cafés with high-quality dining, either catered or self-operated, in a high-quality space. Others have food trucks come in. And in urban locations, if you don’t like the food that’s on site, there’s no end of choices within three blocks.
Meyer: Health and wellness are increasingly important. Everybody is aware of the public health issues of obesity and diabetes that are affected by sitting all day and not getting exercise, as well as not getting good daylight and ventilation. So offices need to give people opportunities to move and to change the height of their desks so they can work standing when they want to. 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. I was in Silicon Valley [recently] looking at a number of properties with some large tech companies as well as development companies, and they are very aware of this. New office developments for big tech clients are nonstarters if they don’t consider sustainability, health, walkability, and access to public transit, bikeways, and walking trails.
What does the future of the workplace look like?
Pullen: A decade ago, people predicted everyone would be working from home in the future. Last year, Yahoo’s chief executive called everybody back to the office and said there’s no more working from home: to raise the bar of the firm, we need to be in the office working, communicating, collaborating, and developing our best practices. And the only way to do that is in person. Any of us can run our businesses from wherever we are with the technology that we have at our disposal these days. But the companies that are doing it the best realize how important direct human interaction is. If you had asked me five or ten years ago, I would have predicted we would be videoconferencing all day. Now, if I do one videoconference a year, I’m lucky.
Meyer: Landlords are not selling space. They’re selling productivity, and the more productive a space is, the higher rents they are going to obtain per square foot. The quality of the space, not the quantity, is going to be the important thing. The opportunity in the future is for people to be really engaged in their work and feel a loyalty to where they work. So employee engagement, the brand equity that you get from a wonderful workplace, is going to translate into profits and drive more high-performance, efficient work environments.
Heinz: I see a real effort to make the office as comfortable and as much unlike an office as it can be. That means greater flexibility, but also wood floors, not carpeted floors. Materials that are common in residential and hospitality design have entered the office. I see the office becoming much more sensitive to its occupants, becoming a well-illuminated, comfortable space that supports the activities of its inhabitants as opposed to controlling the activities of its inhabitants. You need to have workspaces where people really enjoy being there, instead of feeling, “Oh, I have to go to the office.”
Ron Nyren is a freelance architecture and urban planning writer based in the San Francisco Bay area.