51 People And Companies Shaping The Future Of Office Real Estate
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The way we work today is undergoing radical change, to the extent that the era we live in has been called the fourth industrial revolution. Inevitably and rapidly, the office real estate sector is changing as a result.
Just renting out an office on a long lease and leaving the tenant to get on with things, then taking the space back 10 years later, is dying as a viable business model. Like retail, office real estate is now an operational asset that requires hands-on management.
Ahead of the London Office Leasing and Development event on 26 September, Bisnow polled more than 100 experts in the world of office real estate and asked them which people and companies are shaping the future of this sector. Their answers took in developers and investors, coworking operators, occupiers, tech companies and academics. The changing nature of the sector will be led by the people and groups below.
The Owners And Developers
Dutch developer Edge Technologies rose to international prominence after developing the Edge in Amsterdam, for several years the world’s most sustainable office building and a development that pushed the envelope in its use of sensors and other smart-building technology. It is now incorporating circular economy principles into schemes to further boost the sustainability of its buildings. It expanded to the U.S. last year and announced its first London development this year.
HB Reavis has a bigger development pipeline than any company in Europe, in its home markets of Central and Eastern Europe, plus new schemes like Bloom in Farringdon in London. It has a workplace design and strategy team, giving it in-house experts in areas like wellness, neuroscience, psychology and design, rather than turning to outside providers. And it has set up its own data and analytics platform that can measure exactly how staff are using an office, allowing companies to optimise their space and also helping the company to improve future schemes.
Trilogy Real Estate
Robert Wolstenholme’s Trilogy teamed up with LaSalle to build Republic, a 600K SF office scheme in East London that is pioneering in both opening up a new location previously associated with residential, not offices, and also in terms of price. It seeks to incorporate the amenities that are now becoming a must-have for companies in London, but by using clever design and innovative materials, it does so at a far lower cost than its competitors.
Grosvenor can trace its history back hundreds of years, but it has an eye trained on the future in a way that few of its peers can match: It is one of the first property companies globally to commit to making the operation of its portfolio net carbon neutral by 2030, in line with climate change mitigation goals set out by the United Nations.
AXA Real Estate Investment Managers - Real Assets committed to building 22 Bishopsgate speculatively just after the Brexit vote. That wasn’t the only bold decision the company and its partners made with the 1.4M SF skyscraper. More than 10% of the space will be given over to amenities like a food hall, members’ club, health centre and gym, and tenants will have the option to take flexible as well as fixed space in the building, which is trying to redefine what a modern office tower offers to the people who use it.
No London developer has been as successful at luring the world’s most desirable tech tenants as Argent: both Google and Facebook will have their HQs at the company’s King’s Cross Central scheme. In that sense it is building the offices of the companies that are shaping not just the future of office real estate, but the modern world.
FORE is the family office investor set up by Jeff Skoll, the billionaire co-founder of eBay. What makes it different from other family offices is its status as a social-impact investor with a particular focus on sustainability. Former U.S. Vice President Al Gore is among its investors. The company has just completed the greenest new office building in Manchester and its next office in London, Tower Bridge Court, will be zero carbon and will run on 100% renewable electricity, which is very rare in the UK but will be increasingly essential if the UK is to meet its zero carbon 2050 target.
As the world’s biggest specialist real estate venture-capital firm, Fifth Wall is backing the companies that are trying to disrupt and capture value from the changing way people work and use offices. Companies it has backed include workspace firms Convene and Industrious, office management platform Eden and software and data firm VTS.
Portals To A New World
The flexible office boom has democratised the office market, and smaller companies in particular no longer need to sign a traditional lease to find good office space. The logical next step comes via portals like Hubble or Instant Offices, where companies can find and lease space online almost at the touch of a button. The kind of convenience common in restaurant bookings for 20 years has arrived in the office market.
Slack is one of the tech occupiers at the bleeding edge of how workplaces will function in the future, with its offices in the U.S. and Ireland having put wellness at the centre of their design and function. But it is also changing the way people work, making digital interaction between teams in disparate places far easier. It would be much harder for a company like Bisnow, for instance, with offices in more than 10 cities globally, to function efficiently without Slack.
Increasingly for office owners, particularly owners of large schemes and campuses, it is no longer enough to just rent space to a tenant and then be done with it. Building owners want to engage with the people who use their buildings, to give them better amenities and services and gather data on what they like to improve current and future schemes. Tenant engagement apps like Equiem, HqO, Workwell and Eden are providing a digital platform to allow that interaction to happen.
In order to understand how people are really using buildings, you have to be able to track them. For that reason, sensors are playing an important part in defining how offices will be designed and used in the future. Companies like VergeSense, OpenSensors/io, Disruptive Technologies, Basking, and Gooee are creating sensor technology and the analytics platforms necessary to interpret the data collected.
Waiting On The Data Platform
Real estate is widely perceived as an industry that is behind the curve when it comes to using data to drive decision-making. Platforms like VTS and Honest Buildings are trying to change that, and have found particular success with office owners and developers. VTS provides data on every element of leasing, and a platform through which to analyse this data. Honest Buildings provides a similar service when it comes to project management.
Augmented and virtual reality companies like Meta View have the ability to change the way offices are designed, utilised and leased. They give an insight into how an office interior might be set up, before the physical foundations have been laid, with choices around desk ratios given a different dimension. In the future, the first stage of choosing office space will involve a virtual rather than physical site visit, making the process far more efficient.
Cutting Emissions Through Efficiency
The built environment contributes about 40% of carbon emissions globally. In order to fight the climate emergency, developers and owners need to build and operate more energy-efficient buildings, with measurement analytics platforms like Demand Logic and Enertiv allowing buildings to reduce energy use by 30% or more, and make them more efficient to maintain.
Nonprofit architecture and design firm Terreform has pioneered research into how buildings and their materials affect habitats and ecosystems globally and locally. As office tenants and their staff become more climate-conscious, Terreform's work on building materials will become more influential, as buildings will face criticism and pushback if they are not built net carbon-neutral.
Thinkers And Advisors
It has never been easier to determine what office users want, and even what they don't even know they want. Advisory firms like the Centric Lab and Human Metrics Lab are using neuroscientific principles to measure how people’s brains react to the built environment, including places of work, and make them more human-centric.
Easi Space And Landsec
At its prototype centre in Petersfield, UK REIT Landsec is collaborating with Easi Space to design and create new technology and trial new methods to innovate traditional on-site construction processes. This will enable property developers to build faster, more efficiently and more cheaply, all while minimising impact on the environment.
Waugh Thistleton Architects
Cross-laminated timber is seen as playing a major role in making residential and commercial buildings more sustainable, as it reduces reliance on steel and concrete. Architecture firm Waugh Thistleton Architects specialises in schemes using CLT, and has been pushing the boundaries in the kind of schemes that can utilise the technology, working on several major office schemes across London.
Who Would Be A Referee?
In his recent podcast series, Michael Lewis, the author of The Big Short and Moneyball, identified a crisis in the modern world. He said we find it increasingly difficult to trust regulators and referees, even though, in our information-rich world, we have an ever-greater need for them. In office real estate, there are a series of companies that have positioned themselves as arbiters of quality: WiredScore when it comes to digital connectivity, the WELL Institute when it comes to wellness, and BREEAM and LEED when it comes to sustainability. By having an objective measure of quality in these areas, standards are driven up.
The Social Value Portal
The Social Value Portal is a group of social economic experts that promote better business and community wellbeing through the integration of social value into day-to-day business and the uptake of The Social Value Act. Office developers like Landsec are working with The Social Value Portal to calculate the social value generated through education, employment, charity and volunteering programmes. They are challenging businesses to think more widely about how the built environment can have a positive impact on society and local communities. Landsec has now set a new commitment to generate a further £25M of social value through community programmes across the UK by 2025.
Emma Buckland, CBRE
Last year, CBRE promoted Emma Buckland to head up its UK asset services team. With a background in data management, having worked at U.S. data firm FICO, she will run the 800-strong team that manages more than 5,000 UK properties with a rent roll of more than £3B, one of the biggest property management portfolios in the UK.
Professor Jeremy Myerson
When property companies want to know about trends in the future of work, professor Jeremy Myerson is the man they go to. As a director at research and consultancy group Worktech, and a professor of design at the Royal College of Art, he has been at the forefront of predicting, analysing and explaining trends in the way we work for two decades. His latest missive for clients identified such themes as radical inclusion, the desire for staff to keep learning throughout their careers and the inclusion of coworking principles within firms as key trends.
Coworking Companies And Office Occupiers
Love it or hate it, buy its shares or question its valuation, WeWork has changed the global office market forever. After decades as tenants of last resort, flexible office space has blossomed in the wake of WeWork’s growth. WeWork took the Silicon Valley office aesthetic and workplace ethos and made it the go-to style for companies across the world. Every company now demands flexibility in its office occupancy, and traditional office landlords have had to come up with their own flexible offerings to fight back against WeWork stealing their tenants.
The Office Group
Flexible office operator The Office Group has shown that coworking companies can scale up but still make a profit. The company has more than 50 sites in the UK and with the backing of majority owner Blackstone is now expanding abroad, too. Rather than take the WeWork route of seeking economies of scale by taking design and fit-out in house and repeating a format across different locations, each building is different, with separate architects and design consultants. And it is profitable, producing earnings before interest, tax, depreciation and amortization of £17.2M in 2017, up 25% on the year before.
Apple, Google And Their Tech Brethren
Big tech companies like Apple, Google and Facebook have for the past 20 years been the bellwethers of where office design and utilisation is heading: The Silicon Valley aesthetic and working culture has permeated the entire world of work. They don’t always get it right: see the pushback from staff against agile working and glass partitions at some of their new offices. But the idea that offices are places that blend work and social life has become standard in the corporate world. With Google’s new offices at King’s Cross, it will look to set new standards on how an office building and its staff allow access from the people in the surrounding area. And Apple, with its office at Battersea Power Station, has almost single-handedly created a new office district in London.
Coworking And Hospitality Begin To Blur
It has become a cliche in real estate today that every sector needs to act more like the hospitality sector in its focus on amenities and customer service for the people that are using a space. But hotels are getting in on the coworking game, too — people have long been using hotel lobbies to work, so why not try and monetise it? Ennismore is planning to include coworking space at future outposts of its trendy Hoxton hotel brand, with the first such scheme being a new development in Southwark. And on a larger scale, hotel giant Accor plans to put coworking facilities in 1,200 of its hotels worldwide, operated under its WOJO brand.
Finding A Niche In Coworking
IWG is the big coworking firm that is making a profit. WeWork is the big firm that changed the market. The Office Group is the company scaling sustainably. Beneath them are a raft of smaller coworking firms that are finding a niche, providing good quality space and making money. Fora is a top-five London operator that is showing you can provide a high-end offer and fill it. Other operators like Huckletree, The Trampery and Second Home are creating communities of innovative companies that people genuinely want to be in. Convene’s blend of offices and hospitality is a model the industry is increasingly following.
The Wing And AllBright
All-female coworking spaces have proved controversial, with some saying if the goal of equality and diversity in the workplace is to be achieved, integration rather than separation is necessary. But members of such spaces, like AllBright or The Wing (which launched in London this autumn), laud them as a radical solution, spaces where women have the freedom to work and succeed in an environment of their own making, as well as being just really well-designed and executed workspaces.
CIC at MIT
The Cambridge Innovation Centre, started in Boston by a couple of MIT graduates, is an example of how real estate, commerce and academia can work together. It originally failed as an incubator, when it was trying to pick which startups to invest in as well as giving them office space. But it has flourished as a coworking venue, with a location next door to Harvard and MIT that has allowed it to become a nexus between money and research. It has also incorporated flexible lab space, something that biotech startups in particular require. It now has outposts across the U.S.