As Construction Costs Rise, Companies Seeking New Office Space Deploy New Strategies to Protect Their Best Interests

By Christopher Harak
Senior Vice President, Blanca Commercial Real Estate

As construction costs continue to rise and access to construction labor and materials continues to shrink, savvy companies ranging from professional services to technology firms seeking to build new office space are beginning to deploy a new set of strategies and tactics to protect their best interests.

During the past five years, construction costs have increased exponentially in most markets. Today’s construction boom – an ongoing reflection of lingering, post Great Recession pent-up demand – is making matters worse, putting labor and material shortages at the forefront. Consider:

  • Construction companies and their sub-contractors are booked solid, making them more selective of projects they accept.
  • Increased lead times for critical materials are making timelines longer and extending the schedule on general project conditions.
  • Salaries are skyrocketing due to the scarcity of qualified, skilled workers and the increased demand for work.

Today’s smart business owners are recognizing that finding the right office site is about more than finding a nice space in a nice location. They are spending more time upfront to identify the right team of advisors and develop the right methodology to minimize costs and maximize benefits.

Companies today are looking at a new set of criteria when selecting their commercial real estate advisors, including hiring those who can leverage contacts and relationships in complementary service areas, including construction, architecture and design, to help ensure their interests are well represented and their projects can move forward on time and within budget. They are spending more time evaluating potential advisors and ensuring they have the right networks, experience and expertise to support their specific needs.

When selected, their advisors are applying a new set of criteria that align with the companies’ brand identities, overall business objectives, financial goals and corporate cultures.

More specifically, their advisors are:

  • Investing significant time upfront to understand companies’ goals and develop the right requirements and criteria for evaluating potential properties. In today’s commercial real estate marketplace where options and amenities abound, companies are recognizing that it is beneficial to set the base criteria from the onset. This initial planning step is helping them avoid imminent pitfalls and mitigate the overall impact of rising construction costs.
  • Completing thorough cost estimates that include numerous and variable considerations, timing, finish levels, and existing conditions of premises.
  • Anticipating cost overruns and developing alternative options to minimize the impact on companies’ bottom lines.
  • Following a methodical process to engage the market with site requirements, assess properties, short-list candidates and help companies understand the financial implications as they evaluate the alternatives.
  • Leveraging their relationships with contractors and architects in securing estimates that will help companies understand the potential impacts to the overall costs of renovating or building out their spaces. In this phase of the process, they are providing valuable insight to help companies decide whether and when to scale back on expenditures.
  • Weaving into the plans realistic timelines for completion and costs associated with all designers and vendors responsible for final big-ticket items, including finishes, doors, floors, furniture, move costs and décor. They also are including alternative recommendations and considerations (i.e., new vs. refurbished, look vs. quality), items that can sometimes trickle upward during construction and require budgets to be reforecast.

Just as important, savvy companies are recognizing that they must allocate as much time as possible in advance of any planned renovations or build-outs. Gone are the days of waiting one year or less to consider a move. Without a doubt, the more time companies give themselves and their commercial real estate advisors, the better their chances of achieving their goals in today’s challenging and complex construction market. Those who do will gain a significant competitive edge.

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Christopher Harak is Senior Vice President of Blanca Commercial Real Estate, the leading independently owned commercial real estate brokerage firm in South Florida. He may be reached at Christopher.harak@blancacre.com

Companies Seek Next-Generation Office Space to Attract, Retain Millennials

With millennials currently positioned as the largest demographic of our nation’s workforce, a growing number of traditionally conservative companies, including law firms, financial services firms and other professional services firms, are trying to court them with new, innovative workspaces that speak to this generation’s unique desires.

In doing so, these firms are quickly learning that developing next-generation office environments is more complex and requires more strategy than merely finding a modern-looking space in a trendy neighborhood. Here is some insight and a methodology proven to help companies align their real estate decisions with their business goals.

Begin by considering a base set of criteria:

1. Your decision makers: Get consensus early and establish a small group of decision makers to select the space. It also may help to assign an office selection committee to develop a narrow list of potential properties for the decision makers to consider.

2. Your brand identity and business goals: This should be a main filter as you evaluate your options. The right office space will integrate with your overall brand experience and support your business goals by appealing to your target audiences. How well is your brand currently positioned to attract millennials, who seek forward-thinking companies? To what extent should you reposition your brand to appeal more to millennials while balancing the preferences of legacy generations and/or more traditional demographics you also seek to target? Skilled marketing and business-development consultants can help you answer these questions.

3. Your budget: Do not assume a relocation or reconfiguration of your existing space will have to cost more. On the contrary, an efficient workplace design incorporating features that millennials seek can often reduce your footprint and maintain ample room for growth while increasing productivity. The key is to work with experts, including experienced commercial real estate brokers, architects and space planners, who can identify creative, customized solutions to meet the needs of your workforce and clients.

4. Your firm culture: Your office space is a vital part of your firm culture. Increasingly, professional services and tech firms are creating environments that foster teamwork and utilize workspace concepts where team members can collaborate at high levels. In addition to boosting productivity and client and employee satisfaction, these environments are supporting recruitment of millennials.

Knowing that millennials like working collaboratively, taking mental breaks throughout the day, accessing the latest technologies, and enjoying amenities like fitness centers, collaborative spaces and open floor plans with natural light, you should determine the extent to which these elements should be incorporated into your office experience. How would these features impact your company dynamics?

5. Your advisers: Finding the right office space can be a daunting task for business owners to assume alone, so it is important to identify the right advisers, including a commercial real estate broker with a proven track record working with companies like yours. Your broker should conduct a comprehensive assessment, including a thorough financial analysis and forecasting to understand your current situation and identify solutions to support your business goals. Your broker should guide your key decision makers through a brainstorming session to help define your needs today and in five, 10 and 20 years. As part of the process, the benefits of being connected to mass transit and having convenient vehicular access and attractive on-site amenities also should be evaluated.

Better Positioning

After this preliminary work, you should address your office search in three phases:

Phase One: Your leadership team should reach consensus on vision, space criteria,timeline and a recommended strategy. You may want to issue a request for proposals to identify an architectural firm to conduct an occupancy analysis and confirm your optimal space programmatic needs. At this stage, it is important to build internal consensus on the ideal design and utilization plan.

Phase Two: Create a scorecard that informs your decision-making process and helps you make the best selections. This scorecard should evaluate numerous factors including geographic location, parking, onsite amenities, tenant services, walkability and access to public transit. These are all critical components in attracting and retaining the millennial workforce. At this point, engage the market with your office requirements. By touring your top options and creating a short list of locations, you can position yourself to secure the best outcomes and seize immediate opportunities. You also can obtain leverage for your future tenancy and strengthen your position in negotiations with your current and prospective landlords.

Phase 3: When you have consensus on the top two or three options, your broker should negotiate terms based on the filters established in phases one and two. Then your broker should help you complete a lease or renewal amendment, and remain engaged with you until you move into your new space. Transitioning to the workplace of the future is an exciting, transformative endeavor. If done right, it can provide you with a significant competitive advantage and better position your company for continued success.

Tere Blanca is CEO and founder of the Blanca Commercial Real Estate brokerage. She may be reached at tere.blanca@blancacre.com.

Miami Office Market Thrives Due to Young Workers Seeking South Florida Lifestyle

Looking ahead to the rest of 2017, we can expect to see continued improvement of Miami’s office market based on strong market fundamentals and employment growth. Key trends to watch in 2017 that will help drive and shape the market, include:

• Steady, modest growth in office rents

• Declining available office supply

• New transit-oriented mixed-use developments that include office space in both Miami’s downtown urban core and other connected walkable neighborhoods such as Coconut Grove, Coral Gables and Wynwood

• Tenants adopting new office design standards

• Increased moves between submarkets and new-to- market companies positively impacting net absorption

Office demand will continue to be fueled by vibrant population growth of young professionals and Miami’s appeal as a growing, global and entrepreneurial city. Miami-Dade County’s population has grown 8 percent in the past five years, making it the seventh largest county in the United States. In 2016, more than 20,000 jobs were added in the county, predominately in the construction, real estate, professional services and financial services industries. This economic growth has fueled expansion activity in the office market and should hold steady in 2017.

Miami’s focus on cultivating innovation and entrepreneurship has also positively impacted the office market. In the past two years, new co-working spaces have represented over 350,000 square feet of completed lease transactions. Miami has also welcomed a new wave of technology companies to Miami, including Uber, Flatbook and the expansions of Facebook, Google and Skyscanner, to name a few.

Last year, millennials became the nation’s largest workforce demographic and sparked the conversation about new office space trends. As millennials take leadership roles in companies that have established themselves in traditional office environments, those companies are now seeking the next modern and urban office space. Tenants now choose buildings for their connectivity to mass transit and walkability to varied residential, retail, restaurants and entertainment offerings. Unique amenities such as Wi-Fi connected common areas, tenant lounges, fitness centers, bike racks and concierge services are also key drivers.

Fundamentals are Strong

Vacancy drops and building trades will continue to drive up rents. Last year’s strong building trading activity helped contribute to the ongoing rise in rents. More than 3.9 million square feet of office traded within Miami’s four major office submarkets of Downtown, Brickell, Coral Gables and Airport West Dade. As an example, after the new ownership announced common area renovations and new amenities being offered to tenants, Miami’s Courthouse Tower located across the street from Miami-Dade’s Courthouse and a short walk to the new MiamiCentral station now under construction, achieved an increase of more than 40 percent in rents. We expect to see this type of activity continue through 2017.

Building sales generated significant buzz in 2016, with Downtown Miami and its surrounding neighborhoods attracting the most activity. Notable sales include Brickman’s purchase of Courthouse Tower and the 200 Southeast First building for $27 million and $33 million, respectively. Also making headlines, Sumitomo snagged Miami Tower for $348 per square foot, East End Capital bought New World Tower for $270 per square foot and Southeast Financial Center sold to Pontegadea for $516 million ($432.36 per square foot). The significant trading activity in the urban core is a direct result of Miami’s strong appeal as an international city, its strong real estate fundamentals, including significant barriers to entry, steady increase of rents and limited new inventory scheduled for delivery in the next 36 months.

Transit-Oriented Projects

Miami’s fast-growing population and traffic concerns are shifting renewed emphasis to mass-transit solutions. Transit-oriented development has become a new standard for office development. An example is Miami Central, which is slated for delivery in the fall of 2017, redefining regional business connectivity and setting a new bar for what tenants seek in office space. The mixed-use project will deliver 280,000 square feet of office that is already 60 percent preleased, several new food and beverage concepts including Central Fare located within the 160,000 square feet of commercial space and 800 multifamily units designed to meet the needs of young professionals. As tenant demand for access, walkability, and sustainability increases, expect to see an increase in this type of office development in neighborhoods outside of the traditional urban core.

Without doubt, the future for Miami’s office market looks bright. Miami’s international appeal and ongoing foreign and domestic investment into the local economy will continue to drive its continued success within the office market this year.

Looking To The Next Generation For Office Space Needs

MIAMI—Tere Blanca of Blanca Commercial Real Estate unpacks the process for professional service firms as they redesign their office spaces to align with the “workplace of the future” in this EXCLUSIVE commentary.

“Savvy firms are deploying proven methodologies to overcome the obstacles and maximize the opportunities,” writes Blanca.

MIAMI—A rapidly growing number of professional service firms are redesigning their office spaces to align with the “workplace of the future” and reap benefits including improving collaboration, client and partner service, employee recruitment and retention and technology integration. Along the way, they are recognizing that the process is far more complex than merely relocating to a trendier part of town. Savvy firms are deploying proven methodologies to overcome the obstacles and maximize the opportunities.

Professionals today are more focused on the design and location of their offices because they see the impacts on productivity, collaboration, cross selling and cohesion, as well as the ability to attract high-quality employees, particularly millennials. The office space also is an important part of the overall brand experience, as internal and external stakeholders are influenced by the look, feel, and utility of the space.

The latest studies on workplace design confirm that professional services firms are adopting innovative floor plans that incorporate plenty of natural light, open spaces that promote collaboration and innovative workspace configurations to accommodate diverse work processes and projects. They also are incorporating high-tech amenities such as high-tech conference facilities with media walls to connect employees with clients and partners across all points of the globe.

Many firms that have undertaken such redesigns have encountered challenges including internal issues building consensus, understanding their own needs and identifying the right design to support their unique business objectives. The conflicts are often more significant for larger companies in which multiple generations are represented within their leadership, resulting in differing visions for the companies and the office styles that best align to their missions.

These conflicts stem from the fact that until recently, professional service companies have embraced more traditional décor and have kept executives working behind closed doors of individual offices. However, if these companies want to compete for today’s new generation of professionals, they must adapt to their demands: more modern-looking environments with open, collaborative office layouts and the flexibility to work remotely.

Without a doubt, the professional service firms that have successfully transitioned to more modern office designs have taken their office moves more seriously than in years past. Rather than merely hiring commercial real estate advisors based on personal relationships, they are hiring them based on criteria including professional service industry experience, local market insight and a proven methodology to guide them through the process. They are working closely with these advisors to conduct thorough analyses, build internal consensus and guide progress through each stage of the process to ensure they find the dynamic office environments that support their unique needs.

In our experience working with professional-services firms, we have found it helpful to focus on a base set of criteria from the outset, including:

1. Your company’s brand identity and strategic business goals. This should be a key driver as you evaluate your options, either at your existing space or at another location. By kick-starting an internal dialogue on who you are as a company and who you want to become, you can begin to consider some key questions: What type of talent do you want to attract and retain? Are you interested in attracting a younger generation of millennials who are motivated by collaboration and flexibility? What types of clients and partners are you targeting? Do you wish to be known as a traditional, conservative company or as an innovative, forward-thinking company?

2. Your financial goals. It is critical to consider your budget, the amount you are currently spending on your space and the amount you would ideally be comfortable spending. It is important to keep in mind that an experienced commercial real estate broker can help you find the optimal space to meet your needs while significantly reducing your occupancy costs. Do not assume that bigger offices will necessarily cost more. On the contrary, by implementing an efficient workplace design, a professional service company can often reduce its footprint and maintain ample room for growth while increasing productivity. Ultimately, the key is to get the space right by working with experts who can help you find creative ways to affordably obtain your perfect office.

3.  Your company culture. It is important to consider how you want your team, clients and partners to experience your office. How do you want people to feel when they arrive and leave your office? What is the first impression you want your office to convey? Do you want a high-end corporate reception area that “wows” and impresses visitors upfront, or do you want a warm, welcoming area that makes visitors feel comfortable and at home? Do you want your team members to enter your office through a brightly lit open area that facilitates interaction? How would elements like more natural light and communal areas impact your office dynamics? Within your office, do you want to foster more cross-selling between divisions and provide access to the latest technologies? Would your clients, partners and other stakeholders appreciate access to state-of- the-art conference rooms where they can conduct virtual meetings with clients and partners around the world?

4.  The decision makers. The key to achieving the optimum outcome for your office space is to gain consensus early in the process and to identify an appropriate group of decision makers who will be responsible for identifying the right space for the firm. Smaller groups tend to be nimbler and more effective than boards, which often leads to too many cooks in the kitchen and navigating numerous conflicting viewpoints. In some cases, it may also make sense to work with a designated office selection committee to develop a narrow list of potential properties to present to the company’s management for consideration.

5. The advisors. Finding the right office space can be a daunting task to undertake on your own, so it is crucial to identify the right advisors. Your advisor should conduct a comprehensive assessment, complete with thorough financial analyses and forecasts to demonstrate that it fully understands your current situation, and identify viable solutions that align with your future business goals. The firm should help guide your key decision makers through a brainstorming session that will help define your company’s immediate needs as well as looking ahead five, 10 and 20 years. This analysis will ultimately help you define and establish the priorities for your office space. When you have completed these steps, it is important to address the office search in phases:

Phase One: Begin by having your leadership team establish and reach consensus on vision, space criteria, timeline, and a recommended strategy. In the first phase, you must ensure that your company gets these parameters right. Toward that end, it may be advisable to issue a request for proposals to identify an appropriate architectural firm to conduct an occupancy analysis and confirm your optimal space programmatic needs. This will help you identify which industry best practices to incorporate as you identify the best ways to design and utilize your new office space. At this stage, it is also critical to have honest internal discussions with key executives to confirm the ideal design and utilization plan for the offices.

Phase Two: Develop a scorecard that establishes a basis that informs your decision-making process and helps you make the best selections. This scorecard should consider an array of key factors including geographic location, parking, on-site amenities, tenant services, walkability, and access to public transit.

At this stage, you should begin to engage the market with your established office requirements. Developing a short list of contenders and touring your top choices will give you greater leverage for your future tenancy as the current landlords and owners of prospective new locations begin recognizing your name and your interest. It also will ensure that your firm is well-positioned to secure the most favorable outcomes and seize immediate opportunities as they present themselves.

Phase 3: When the team has reached consensus on the top two or three options, your commercial real estate advisor should negotiate terms based on the criteria and benchmarks established in phases one and two. Then, your advisor should help you complete a lease or renewal amendment, and remain engaged with you throughout the process, from preliminary renovations to ultimately moving into the new space. Indeed, transitioning to “the workplace of the future” is an exciting moment that can be positively transformative for professional service companies. To ensure your business capitalizes on this important shift, it is critical to follow proven best practices and methodologies to ensure the best-possible results. Professional service firms that do this can gain a significant competitive advantage and better position themselves for continued success.

Finding the right office space for your firm

Accounting firms today are increasingly striving to redefine their office spaces in an effort to reap the benefits of the “workplace of the future.” These benefits include attracting and retaining quality talent, fostering a more collaborative work environment, providing better client and partner service, and accessing the latest technologies. However, accounting firms are recognizing that the process is more complex than they had imagined. Following is some insight and methodology that has proven to help accounting firms of all sizes navigate the complexities of aligning their office spaces with their business goals.

Without a doubt, the right office space can significantly improve productivity,collaboration, cross-selling and cohesion, and enhance an accounting firm’s ability to attract and retain quality talent, particularly Millennials. The office space also is an important part of the firm’s brand experience. Internal and external stakeholders will be influenced by the look, feel and utility of the space.

Our experience working with accounting firms and the latest studies on workplace design confirm that the profession is adopting innovative space plans incorporating lots of natural light and open space, office layouts that foster collaboration, and innovative workspace configurations to accommodate diverse work processes and projects. In addition, accounting firms are incorporating high-tech amenities in individual workspaces, such a media walls in professionals’ offices, as well as in common areas, such as high- tech conference facilities to connect employees with clients and partners across the globe.

At the same time, firms are encountering key challenges adopting the workplace of the future, including: internal issues building consensus, understanding their own needs, and identifying the right design to support their business objectives. The conflicts can be more significant for larger accounting firms with multiple generations represented within their leadership and often conflicting visions for the office styles that best align to their missions.

To a large extent, these conflicts stem from the fact that accounting firms historically have embraced more traditional décor and have kept executives working behind the closed doors of large offices. Meanwhile, today’s new generation of accounting professionals is interested in more modern-looking environments with open, collaborative office layouts and the flexibility to work remotely.

The accounting firms that are successfully navigating these internal conflicts and securing appropriately designed office spaces are enjoying significant benefits. How are they achieving this? Among other things, they are taking their office moves more seriously. Rather than merely hiring commercial real estate advisors based on personal relationships, they are hiring them based on criteria including accounting industry experience, local market insight, and a proven methodology to guide them through the process. They are working closely with these advisors to conduct thorough qualitative and quantitative analyses, build internal consensus and follow a proven methodology to create dynamic office environments that support their unique needs.

We have found it helpful for accounting firms to focus on a base set of criteria from the outset, including:

1. Brand identity and strategic business goals. This should be a key driver as firms evaluate their options. The exercise will facilitate internal dialogue on who they are and who they wish to become. Some key questions to consider: What type of talent does the firm want to attract and retain? Is the firm interested in attracting a younger generation of Millennials who are motivated by collaboration and flexibility? Does the firm wish to be known as traditional and conservative or as innovative and forward-thinking? What types of clients and partners are being targeted?

2. Financial goals. It is critical to consider budget – specifically, the current amount being spent on the space — and compare it with the desired amount. Do not assume that bigger offices will necessarily cost more. On the contrary, by implementing an efficient workplace design, firms can often reduce their footprint and maintain ample room for growth while increasing productivity. Ultimately, the key is to get the space right by working with experts who can identify find creative, customized solutions.

3. Company culture. How does the firm want its team members, clients and partners to experience the office? How does it want people to feel when they arrive and depart? What is the first impression it wants clients and partners to experience when they arrive? Does it want a high-end corporate reception area that “wows” and impresses visitors upfront, or does it prefer a warm, welcoming area that makes visitors feel comfortable and at home? How would elements like more natural light and communal areas impact office dynamics? Within the office, does the firm want to foster more cross-selling between divisions and provide access to the latest technologies? Would clients, partners and other stakeholders appreciate access to state-of- the-art conference rooms where they can conduct virtual meetings with people anywhere in the world?

Increasingly, we are seeing accounting firms focused on establishing cultures that promote collaboration, as well as adopting shared workspace concepts where executives and staff members can come together, have meaningful conversations, and create the deep collaboration that occurs in spaces that truly enable people to connect face-to- face. This higher level of collaboration and communication is proving to enable accounting professionals to better serve their clients and boost employee satisfaction. It also serves as an effective tool for recruiting and retaining the right talent, especially Millennials.

4. The decision-makers. The key to achieving the optimum office space is to gain consensus early in the process and to identify an appropriate group of decision makers who will be responsible for identifying the right space for the firm. In our experience, we have found smaller groups to be nimbler and more effective than boards with too many team members with conflicting viewpoints. In some cases, it may also make sense to work with a designated office selection committee to develop a narrow list of potential office properties to present to the company’s management to consider.

5. The advisors. The complex process of finding the right office space can be a daunting task for accounting firms to undertake on their own, so it is crucial to identify the right advisors to provide guidance and representation. It is wise to identify commercial real estate advisors who have successfully advised accounting firms and have a track record for securing the optimal real estate solutions for these clients. When selected, the advisors should conduct comprehensive assessments, including thorough financial analyses and forecasting, to fully understand the current situation and identify viable solutions that align with future business goals. They should help guide key decision-makers through brainstorming sessions that will help define the firm’s immediate needs as well as looking ahead five, 10 and 20 years. This analysis will ultimately help the firm define and establish the office space priorities.

When these steps have been completed, it is important to address the office search in phases:

Phase One: The firm’s leadership team should establish and reach consensus on vision, space criteria, timeline, and a recommended strategy. In the first phase of the process, it will be critical to ensure that the firm gets the space right. Toward that end, it may be advisable to issue a request for proposals to identify an appropriate architectural firm to conduct an occupancy analysis and confirm the optimal space programmatic needs. This will help identify which industry best practices to incorporate and the best ways to design and utilize the space. At this stage, it is critical to have meaningful internal discussions with key executive team members to confirm the ideal design and utilization plan for the offices.

Phase Two: The firm should develop a scorecard that establishes a basis for informing decision-making process and making the best selections. This scorecard should consider an array of key factors including geographic location, parking, on-site amenities, tenant services, walkability, and access to public transit.

At this stage, it is important for the firm to engage the market with its established office requirements. Touring its top options and developing a short list of candidates will give the firm greater leverage for its future tenancy. This also will drive a productive dialogue with the current landlords and owners of prospective new locations. It also will ensure the firm is well- positioned to secure the most favorable outcomes and seize immediate opportunities as they present themselves.

Phase 3: When the team has reached consensus on the top two or three options, the firm’s advisors should negotiate terms based on the criteria and benchmarks established in phases one and two. Then, the advisors should help the firm complete a lease or renewal amendment and remain engaged with the firm through the entire process, from the renovations to the occupancy of the space. Indeed, transitioning to “the workplace of the future” is an exciting moment that can be positively transformative for accounting firms. To ensure a firm can capitalize on this important shift, it is important follow proven best practices and methodologies to ensure the best-possible results. Accounting firms that do this can gain a significant competitive advantage and better position themselves for continued success.

Tere Blanca

Tere Blanca is CEO and founder of Blanca Commercial Real Estate, a leading independently owned commercial real estate brokerage firm in South Florida.

Innovative Office Spaces Attract Millennials

Huddle rooms, smart boards, showers, proximity to mass transit — urban- dwelling millennials have a new set of requirements for the workspace.

A growing number of businesses — ranging from startup technology companies to professional services firms — are using innovative office spaces to court millennials, currently the largest and a highly coveted segment of the workforce.

With millennials taking leadership positions at companies, technology, marketing, legal, and accounting firms that historically have established themselves in traditional office environments are now seeking the next modern, urban office space. It is what millennials, who primarily live in urban cores, expect.

City views and large, closed-door offices are rapidly losing popularity. Top questions from millennials today include the following: Is the building LEED- certified and environmentally friendly? Does it have a fitness center? Showers? Bike racks? Is it walkable to restaurants, shopping, and residential options? Here are the most coveted features:

  • Connectivity to mass transit and varied amenities
  • Smaller offices in open, collaborative work environments with sharedmeeting spaces
  • Ease of access for walking or biking to work
  • Standing desks and huddle rooms with comfortable furnishings, like bean bag chairs and smart boards for employees to work more creatively and collaboratively
  • Buildings that offer common-area Wi-Fi connected lounges for tenants
  • Concierge-style services like dry cleaning pickup and delivery
  • High-tech features such as “smart” frosted windows that offer instant privacy at the flick of a switch
  • Minimal, modern furnishings

Sustainability also is a growing priority today, as it is appreciated by younger generations and can support operational efficiencies. Their preference of walkability and utilization of public transit affords companies the opportunity to give employees Uber credits and transit passes at a lower rate than subsidizing increasing parking costs in urban areas.

 

Beyond providing a competitive advantage in employee recruitment and retention, adopting the “workplace of tomorrow” also enables companies to provide more collaborative work environments and better client and partner service.

However, adopting a next-generation workplace comes with challenges. Companies are finding it is more complex, and in some cases more expensive, to retrofit and adapt an office than to relocate to a more modern, efficient space that incorporates new standards in a trendier area. Here is some methodology to help companies align their office spaces with their financial, talent acquisition, and retention goals.

First, it is helpful to focus on a base set of criteria from the outset, including:

1. Your company’s brand identity and business goals. What kind of talent do you want to employ and what is your employee growth trajectory? Which clients and partners are you targeting, and howshould you appeal to them? Should you position your company as traditional or forward-thinking?

2. Your financial goals. What do you currently spend on office space, and what do you want to spend? A commercial real estate broker can help find the optimal space and even enable a company to expand its footprint while reducing occupancy costs.

3. Your company culture. How do you want your team, clients, and partners to experience your office? What impression do you want to give when they arrive and depart? How would elements like more natural light and communal areas impact office dynamics?

4. Your decision makers. Who are the most appropriate stakeholders tolead the office space search? Smaller groups can be nimbler and more effective than large committees.

5. Your advisers. It is wise to identify a commercial real estate adviser with a track record for securing optimal real estate solutions for clients in your industry. The adviser should conduct a comprehensive assessment, including a thorough financial analysis and forecasting, to understand the company’s situation and identify viable solutions that support business goals today and in the coming years.

Next, it is important to address the office search in phases:

Phase One. The leadership team should reach consensus on vision, space criteria, timeline, budget and strategy. It is critical to ensure your company gets the space right and at the right terms. It may be advisable to issue a request for proposals to identify an appropriate architectural firm to conduct an occupancy analysis and confirm optimal space programmatic needs. That will reveal which industry best practices to incorporate as you identify the best ways to design and utilize the space. At this stage, it is critical to have meaningful internal discussions with key executive team members to confirm the ideal design and utilization plan.

Phase Two: Develop a scorecard establishing a basis to guide the decision- making process. The scorecard should take into account key factors like geographic location, parking, on-site amenities, tenant services, walkability and access to public transit.

At this stage, engage the market with office requirements. Touring top options and short-listing candidates will increase your leverage, driving a more productive dialogue with current and future landlords. It also will best position your firm to secure the most favorable outcomes and seize any immediate opportunities that present themselves.

Phase 3: When the team has consensus on the top two or three options, your adviser should negotiate terms based on the criteria and benchmarks established in phases one and two. Then, the adviser should help you complete a lease or renewal amendment and remain engaged throughout the entire process, from renovation or build-out to occupancy.