In the post Great Recession era of commercial real estate leasing, we frequently hear one, some, or all of the same four (4) criteria from office users:
- I want a shorter lease term
- I want a more flexible space
- I want a more efficient space
- I want to make my space “cooler”/ in line with my brand
These appeals to the office leasing market are by no means “new” or peculiar to the post-bubble world, but the real estate occupancy solutions for business owners and commercial tenants alike are most certainly not the same as 20 or even 10 years ago. Why?
Because we don’t use space like we used to.
The modern office is no longer a fixed hierarchical beehive configuration of cubicles and private offices in the suburbs. Between major technological advances, a flattening corporate executive organizational model, a substantial trend towards re-urbanization, and a pronounced and growing demographic shift to a younger generation of Millennial users, the archetypal “office” has transcended its staid drywall-partitioned office park model and moved on to something much more conceptually fluid, lean, and urban.
Because business and industry change are so much more dynamic by the 21st century technological edict, so are its actors and users….and so it goes for real estate as well. Rest assured, this trend is not just “trending” –accelerated change and user-responsive design across all product types is the new standard in commercial real estate’s tried and true academic bible of “highest and best use”. As technology continues to disrupt operational strategy, the likeliness for a boomerang back to the old office footprint of strictly siloed allocations of space seems to look less and less likely.
The New Creative Office Space
But the new office is built for change; it is a malleable symmetry of public and private spaces. The new office is adaptable, flexible, dynamic, attractive, and convertible space that is both broadly functional and culturally brand-driven. It’s creative, collaborative, expressive, authentic, and innovative. This means that the “face” of space boils down quite a bit more to aesthetics, workplace culture, and responsive functionality for users. It also means that the look, layout, and feel of office space is more important to users than ever. This new(ish) design trend is fast-approaching industry standard for a number of Class A office users, start-up’s and Fortune 500 companies alike, for everything from location to office layout to finishes and even down to the lease structure.
In Richmond, this trend has found a substantial foothold in the neighborhoods of Scott’s Addition, Manchester, and throughout several redevelopments and adaptive reuse projects of post industrial and retail buildings throughout its CBD (Central Business District). Why? These neighborhoods are all comprised of buildings, many of which are historic, which lend themselves easily to creative office space design. They are a robust deviation away from the standard wall- to-wall carpeted, drywall mazes of low hung- ACT ceilings (acoustic ceiling tile) and windowless offices which abound throughout traditional suburban office product. Scott’s Addition and Manchester provide ample inventory which offer open expanses of uninterrupted space, tall ceilings, unique historic/architectural features, and frequently, abundant natural light. Their locations also provide excellent walkable proximity to an assortment of breweries, eateries, and high-end craft-based trade and design industries such as architecture, furniture making, wood-working, and tech manufacturing–to name just a few.
Brand Allies and the Rise of “Place”
Not coincidentally, many of these pre-existing trade and design-based tenants in places such as Scott’s Addition, the CBD, or Manchester are very much a part of the attraction for creative office users. Identifying a “cool” warehouse or retail space alone to build out, brand, and occupy is not enough. Users are looking to co-locate where there are surrounding businesses which represent brand values that resonate with a given company– or amplify the communication of its brand to its users. These are values such as creativity, collaboration, local/handmade, and authenticity. Sound familiar?
Creative office space is becoming as much about place and culture as it is about design.
This trend plays out every day on platforms such as Instagram where a creative office user might call out the design/builder of their custom conference table or conversely, where the designer/builder might call out the latest tech start-up for which they are building that conference table– a type of co-marketing and brand association which would not be nearly as facile, accessible, or perhaps even brand-strategic 20 years ago as it is for businesses today. In other words, users are looking to communicate their brands into a culture-based context through their real estate occupancies– beyond the traditional platforms of referral-based business and the homogenous blank synergy of a suburban business park.
What’s next, Richmond?
So what does this mean for Richmond in the years to come? No doubt, the transformation of Richmond’s CBD, Scott’s Addition, and Manchester will continue to expand, densify, and iterate upon these themes. Like any kind of real estate development trend, the more density that occurs, the more development will occur. This is the fundamental feedback loop endemic in real estate development. And while the industry may not be as literally “industrial” as it once was in these neighborhoods, the new wave of users is building a new engine.