SEA CHANGE IN THE
The last time we met, for the Q3 edition of Professional Report, we chatted about the progress being made in the industrial market, the "I" in SIOR, if you will, changes
taking place at the hands of exponentially growing technology
and the trend of manufacturers to reshore. No less dramatic
changes are taking place in the "O," the office side of the
equation, literally transforming the way these environments
look and function.
First the statistics. According to the latest data from CBRE,
the market is in full-bore national recovery. "By virtually
all metrics," writes Americas president for agency and asset
services Ed Schreyer, "the second quarter of 2014 was one of
the most robust we have seen in years." More than 15 million
square feet of Q2 net absorption was the highest since 2007,
he reports. In addition, the US vacancy rate dropped by 30
bps, and "at 14. 5 percent, office vacancies have hit the mid-
point between their pre-recession low and recessionary peak."
Happy days are here again.
But the numbers tell only a part of the story. There is a
sociological shift taking place in the country's offices, one at
the hands of a new generation of users.
This shift is "completely driven by the younger generation,"
says newly elected SIOR president Angela West, who states
her belief that the office market is indeed in full recovery. This
new generation “may not be the drivers within management,
but they understand how important job satisfaction is. The
mindset no longer exists where you start after college and
spend your entire career at a company and retire with a
That implied freedom and the mobility to work where they
want or need to and enter the office when collaboration is key
far outweigh the traditional touchstones of career advancement,
the private office and the walnut plaques. It is this “autonomy
to make those decisions on their own" that is, says West,
pushing employers "to be far more innovative than they have
in the past."
"There is a sense of entitlement with senior people who have
earned their way up to that private office," adds Schreyer. On
the other hand, "the up-and-coming generation is the first to
say, 'I am willing to not have the traditional career trophies.
I'd prefer an environment where I can find a spot and plug in."
Not all of the shifts taking place in the office today can be
laid at the doorstep of the Millennials. The advancement of
technology, just as it impacts the industrial sector, retail and all
walks of our lives, is making its presence known in the office
more than ever.
Hoteling, a concept that is as old it seems as the paperless
office, is a fact of life today along with other "workplace
strategies, such as free addressing" says Schreyer. It seems that
"every firm, including law firms, are trying to figure out how
to employ hoteling in order to achieve greater efficiencies, not
just square footage. Workers no longer need to be bound to an
office or cubicle in order to reach the best work environment."
And while the worker is off hoteling, other employees can
take advantage of the freed-up space and the amenities that go
along with it.
W. JASON GRACE, CCIM, SIOR
SR. VICE PRESIDENT
DAVID REMMEL, PE, SIOR
THOMAS POSAVEC, SIOR
SR. VICE PRESIDEN T
Representing clients in the
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INDUSTRIAL I OFFICE I RETAIL I INVESTMENT I MULTI FAMILY
By John Salustri