The Future Of Office Space: Neither Open Nor Private
Not so long ago, the future of office space meant open space and more collaboration. But that paradigm is not any more permanent than steno pools or carbon paper, the speakers at Tuesday's Phoenix Office of the Future event said.
The event's Development, Investment & Acquisition panel said as hot as the Phoenix office market is, there is still a race to provide what tenants want. Flexibility in the workspace is increasingly important. How people work is not totally collaborative or totally traditional, though different companies have a different mix of those. Thus the need for a flexible mix.
Easy-to-use technology in the office is another important amenity that will need to be in place in the future, since it is not quite there yet. Employees should be able to walk into workspaces and collaborate with other employees using a digital whiteboard, wireless content sharing and other features that are ready to go, without having to call the IT department to set everything up.
Densification means a loss in productivity if open space is too emphasized, the speakers said. A number of property owners in the Phoenix market have noticed tenants that went fully open space a few years ago are now adding some private spaces. No one is going back to fully traditional offices, but there is a realization that some private areas are necessary some of the time.
Density also means more parking, at least for now. But will that be the case in the world where Uber-like services are standard and driverless buses ply the roads? That is a little hard to predict. What do you do with an underground garage when nobody drives to work anymore? Spaces also need to be a further mix of home and office work environments in the future, because employees are coming to expect that.
The event devoted an entire panel to the 2M SF Marina Heights development in Tempe, whose fifth and final building delivered just last month. It is the largest office development in the history of Arizona, and will house as many as 8,000 employees, anchored by State Farm. But it is more than simply a large development, our speakers said. In many important ways, it represents the creation of an entirely new place.
Tempe Mayor Mark Mitchell said Tempe has supported the project for years, including both public and private sector players. The city dedicated staff to the project, to help streamline approval since time is money, and this particular project would not have worked without a precise timeline.
"We understand what it means to have deadlines," the mayor said. "That doesn't just apply to this development. It helps attract companies that want to come to Tempe, because facilitating development says to the world, 'We're open for business.'"
Arizona State University assistant vice president, real estate development John Creer said Tempe is the hottest submarket in the Valley, and a university is the best anchor a development can have.
"It sets the tone for the quality of development that will occur, and the tenants that will come to the building," he said.
The goal is to create live/work/play over the long term, he said. The district will ultimately have 6M SF to 7M SF, but the university is in no hurry, and wants to continue to partner with the right developers for its land.
Sunbelt Holdings senior vice president Heidi Kimball said State Farm expected a strong retail component, especially food service. The company wanted cost-effective food service options for its employees, available around the clock. Compass was hired to manage most of the 57K SF of retail, and it has done an excellent job, she said. There is a café, a quick service component, Starbucks and more. The space also includes a wellness component for State Farm employees, with a clinic and a fitness facility.
Ryan Cos. chairman John Strittmatter detailed the remarkable construction process, which involved over 1,000 workers on-site every day in a four-year, 24/7 effort to build all five office towers. That involved a lot of superlatives, such as pouring concrete every day for two years, which took 31,000 concrete trucks all together, and removing 420,000 cubic yards of dirt. More fundamentally, he said, the development was remarkable in that all of it was built on a computer first, then in actuality, which made the process more efficient and of higher quality.
The design of both the interior and exterior spaces empowers employees with choice, according to DAVIS CEO and director of design Mike Davis. The first level includes not only retail, restaurants and fitness facilities, but also access to public transportation and public parking. Outdoor spaces provide additional options for workers, either during their breaks or after work.
Workuity founder and chief executive Dan Kite also spoke. Workuity is a shared office and co-working facility offering workspace to its members, including a range of work areas, offices, and a layout that promotes social connections, collaboration and creativity, he said. Workuity's flagship facility at 24th and Camelback — where the event was held — offers 18,500 SF for nearly 250 people. The space allows companies to take only what they need, yet preserve their ability to expand.