5 Trends To Expect In Austin's Future Office Space
Austin's tech-heavy office market comes with plenty of perks, but do not expect to find corporate status symbols like reserved parking and corner offices.
The traits of Austin's office market are true of almost any tech-heavy office market: lots of tech companies downtown and at The Domain, abundant maker space and yoga studios to please company recruits and lots of co-working options.
What marks Austin as different, according to panelists at Bisnow's Future of Office Space event, is the growing challenge of cars and congestion in the city.
"Traffic is changing the way people select office space, the way they're going to build it out and the way they're going to use it," HPI Real Estate Services and Investments partner Sam Houston said.
He said it is among the top three concerns for most companies, driving how they select and use locations.
Austin cannot avoid its congestion. That is not a landlord or tenant issue, in particular, but it is an issue developers must face, said Murray Jardine, a senior vice president with TIER REIT, which is developing Third + Shoal. Jardine quoted someone who spoke to a group about traffic a couple of weeks ago.
"He said, 'Who thinks we need to add more lanes on freeways or surface streets to solve our traffic problems?' And he saw a lot of hands," Jardine said. "Then he asked, 'Who thinks you can solve obesity by buying a bigger pair of stretch pants?' And no one raised a hand."
That is the issue about parking in Austin, Jardine said. More spaces cannot resolve the problem. Ultimately the answer to parking spaces and traffic congestion comes down to a public solution.
Beyond traffic, panelists offered views on options in office space. Here are some of the other office space trends noted by the panelists:
Rethink Your Traditional Amenities — Office space must go beyond four walls and a door, Boxer Property President Justin Segal said. The industry is moving to a place where what service a landlord can provide is as important as the space. Boxer created a ground-floor "food layer" in one of its buildings for use by office tenants. Tenants order food online, can book a pop-up chef, whip up an office party and offer discounts for particular employee groups.
"That's the kind of thing that people want," Segal said. "They want things that can bring them together and provide tenant services."
National Instruments Director of Global Facilities Scott Strzinek said he loved Segal's idea. Employees can get tired of one restaurant serving the same menu, month after month. The Boxer model of food service made sense.
"That gives you total control over the menu, lots of flexibility, catering you can bring up to your suite," Strzinek said. "That's fantastic."
Out With The Corner Office — The top floor in most high-rises used to belong to the chief operating officers. At Third + Shoal, the 29th floor will be a fitness center and tenant lounge, with views to the south and west.
It makes sense to put the lounge and fitness center where they will get the most use, Jardine said. A gym on the second floor, looking out at a parking garage, is a gym that does not get used.
Smaller businesses may not have the space for amenities, but every company wants the same bells and whistles, Jardine said.
"It's not just the tech industry," Jardine said. "It's all tenants, all industries. They want their employees to come there, stay there."
Scratch The Reserved Parking Spaces — Segal said this is the best way to decrease dependence on cars. Nothing is a greater waste of space in an office building than a sea of empty parking spaces in a garage, and Boxer Property is phasing out those spaces as leases expire.
"We make that very expensive in our leases to have that reserved parking," Segal said. "I know it's very low-tech, but it really works."
Other panelists said they intended to have a much lower reserved parking ratio.
Co-Working Can Serve All Types Of Companies - Not only entrepreneurs find co-working space useful. Facebook has leased WeWork space in The Domain to onboard new employees, HPI's Houston said. That additional space, on top of Facebook's office space, gives more flexibility.
It also comes with cool amenities. Impact Hub Managing Director Ashley Phillips said swings are her co-working spot's best amenity. When work gets stressful in the office, entrepreneurs can walk out to the backyard for respite, to swing on the swings or sit by the fire pit.
Office Space As Recruiter — Segal spent a recent visit in Silicon Valley tailing recruiters. Like the milk in the back of the grocery store, interview rooms are in the back of the best tech companies, Segal said. That way, any job candidate gets a full tour of company amenities.
Such an approach gets the most bang for a tenant's buck, Segal said. He also finds it important to think of amenities as part of the bigger picture to position them best and attract users.
"I think that as landlords or as employers, we need to think, 'What is the vocabulary that we're using to describe these things? What is the picture we are painting?'" Segal said. "It's great to have these things, but it's the next level up to teach our teams how to describe these things so we get the most benefit out of them."