06 Jan Are Cubicles In Corporate Office Spaces Obsolete?
Over the last couple of weeks, we’ve discussed the 2016 trends of real estate in theSt. Louis area as predicted by Urban Land institute. This week, we are diving into the changing landscape of corporate (and not-so-corporate) office spaces.
What’s shifting in Corporate Office Spaces?
More like, “who” is shifting corporate office spaces? The transitions predicted directly link to the generational shifts occurring in today’s workforce. Gen-Xers are now those running businesses and there is a rapid influx of Millennials entering the workforce.
Young talent is drawn to urban amenities and living, thus leaving ample opportunities for real estate development within the urban landscape. These generations are the driving force of the current redesign of corporate office spaces.
Open-air, Coworking Office Spaces
Corporate office spaces are moving toward accommodating a mix of open areas and private/semi-private designs, says the ULI. The rise of the 18-hour city model dictates more integration in the use of space, from housing to retail to office.
Newer generations are knocking down the walls and cubicles, aiming for a more open-air workspace that reflects collaboration and synergy in the office space. Many interviewees in the study stated the main advantage of an updated, open-air office space is a tool to capture younger generations not interested in the stereotypical cubicle office space. Businesses are looking for cool, hip, open spaces that encourage new thought patterns brought on by the influx of information and technology.
Co-working and incubator office spaces are a great example of this shift. They provide more than just an office. They also promise amenities and collaboration more than a traditional office space allows and are nicer and more presentable than a table at a coffee shop.
These office spaces are especially appealing to start-ups whose unique needs are affecting the layout of office spaces. Looking to make a good impression on clients,co-working office spaces help keep start-up and overhead costs low while the business gets off the ground. It also allows them more space to work with less commitment.
The Urban Boom
With younger generations moving back into urban areas and the rise of the 18-hour city model, urban, mixed-use properties are considered an excellent prospect. The live/work/play environment trend is just getting underway; so don’t expect this to go away anytime soon.
As an investor, these markets are high in potential for not only office space development, but also, residential, retail and restaurant venues. The key is to find quality urban markets in secondary cities in which to invest.
One ULI interviewee warns that cities with a high cost of living, like New York and Los Angeles, will actually deter young talent straight out of college, so secondary cities like Nashville, St. Louis and Denver are ideal for investment.
Building these types of spaces is typically more expensive, says one interviewee of ULI, but if done correctly, you can create a highly productive office space that fits a wide variety of needs.
Don?t worry, suburban office spaces are not obsolete, says ULI. Eventually, the aforementioned young talent will start settling down with families, causing them to reconsider the suburbs. So dictates the pendulum swings of the market.
Big Tip for 2016: It’s predicted that medical offices are on the verge of a large boom. This comes as the Baby Boomer generation is about to face the high medical costs of old age. Additionally, due to the Affordable Care Act, more Americans with health insurance are seeking quality care.