As panelists demonstrated at the 2014 ULI Fall Meeting, owners and developers are generating new demand for office space by repositioning entire neighborhoods and developing new mixed-use buildings to meet the needs of office users.
South Lake Union, Seattle
Ada M. Healey, vice president of real estate, Vulcan Inc., showed the strategy behind her firm’s innovative 6.3 million-square-foot (585,000 sq m) development on 33 acres (13 ha) in South Lake Union. “We decided early on that this would be a community not only for people who can afford high-end places, but [also] to offer a range of options and affordability across product types. We’re attracting a great mix of retail, for example, with recognized names as well as very local, authentic shops. We even have the region’s best Indian restaurant, according to the New York Times.
“And among the many logos you see here [on a PowerPoint list of more than 60 retail tenants], you also recognize Starbucks, I’m sure, which for us is just another successful local retailer,” she quipped.
South Lake Union also exemplifies Vulcan’s overall development strategy, she said: “Start early, think big, work together, look ahead are the guiding principles that have influenced our success in South Lake Union.”
One early-adopter commercial tenant was the University of Washington, which optioned several blocks of space, in phases. Seattle Biomed joined early as well. “These medical/biotech organizations took a slight risk by coming in first, but they recognized the neighborhood we were trying to create and the opportunity it presented for them. It also gave us some important momentum. They were basically like a startup coming into South Lake Union and partnering with us, which worked great.”
A key attraction of Vulcan’s South Lake Union neighborhood-scale design was the activated public spaces and engaging pedestrian experience, she said.
“Sustainability is actually a strong value proposition in the Pacific Northwest, so we made it a core component of how we developed and operate these spaces,” she explained. “There are a lot of plazas and open spaces with a variety of retail, changing activities, and entertainment as well as a regular farmers’ market. We also have invested in a lot of public art that draws people in, instead of being just things to look at.”
Innovation Park, Charlotte, North Carolina
Developer BECO South took similar approaches to a very different challenge: redeveloping and re-leasing a vast office/industrial property of 13 low-rise buildings on a campus in Charlotte, North Carolina.
Rechristened Innovation Park, the 1.9 million-square-foot (176,500 sq m) complex was brought from 35 percent occupancy to 95 percent today through a multipronged strategy—with a key element of creating the amenity spaces, support retail, and “sense of place” early in the project, rather than waiting for substantial lease-up.
“Our early investment in the amenity side of Innovation Park sent a strong, clear signal to prospective tenants that this would be a great neighborhood where employees would enjoy coming and would be well served beyond just the workplace,” said Chris Epstein, president of BECO South.
The redevelopment and design of Innovation Park focused on amenities and offerings that today’s worker wants, “everything that you’d want and need, right here, so you don’t have to drive elsewhere—food, dry cleaning, a farmers’ market, exercise, shops and retail, everything,” he explained.
“Office space today isn’t only about the workplace, but about life and the life of your business,” he said. “We didn’t just create a bunch of amenities and empty exercise gyms, but tried to create a set of experiences, and supported it with a strong communications and information campaign so people knew what was there and were encouraged to take part. And we put a lot of effort into the little things, such as fresh flowers for tenants and a great wi-fi service called BECONet just for tenants.”
Filling out the current tenant roster are Aon Hewitt, Allstate, Technicon Acoustics, Zayo Group, AXA Equitable, and Wells Fargo.
Salesforce Tower, San Francisco
Paul Paradis, senior managing director at Hines, shared stories about the long road to success for the super-tall Salesforce Tower office building, adjacent to the Transbay Transit Center complex in San Francisco. At 61 stories and 1,070 feet (326 m), it is slated to become the tallest building on the West Coast upon completion in 2017.
In planning the then-spec office tower Hines was awarded in 2007, the development team—joined midstream by partner Boston Properties—decided that the attributes sought by technology tenants would be important in winning both technology and nontechnology firms alike.
One design innovation of the project was overstandard slab-to-slab floor heights of 14 feet 9inches (449.6 cm) that enabled the incorporation of under-floor HVAC, resulting in one-direction, 100 percent outside air to every floor and easy access infrastructure. The 13-foot (3.9 m) ceiling heights and ten-foot (3 m) continuous glass line create voluminous interior space and abundant natural light. “Since the columns are all located at the perimeter of the floor, the planning module is very efficient for office and cube-dense layouts,” he said.
“Our Mission Square ground-level park space is a great experience for both employees and the public, with large redwood trees like those in California’s national parks; there are plenty of gathering spaces [in which] to relax with friends or work on your laptop if you want,” said Paradis. “Building lobbies are convenient for gathering but will also be inviting,” he said, “like a large living room where you can meet over coffee or lunch, or connect to work through the building’s wi-fi.
“There was some doubt at the time we were developing the building that tech firms wouldn’t be interested in vertical space because they’ve typically sought out campus space in Silicon Valley, or warehouses and existing buildings in San Francisco,” said Paradis. “Then Salesforce stepped up and took about half the building, including a ground-floor retail area that they’ll use for a branded customer experience space. They’re a great tech firm that will really take advantage of all that the building and the city have to offer for their employees and for their clients.”
