Creative Office Catching On Quickly In Coastal San Diego
San Diego office users joined the creative office movement over the last five years, and the majority of them have already embraced it, Bixby Land Co SVP Mike Severson, whose company specializes in creative office build-outs, tells Bisnow.
Mike is among the all-star cast of professionals presenting at Bisnow's San Diego Future of Real Estate event Thursday at the Sheraton Hotel and Marina in Downtown SD. We caught up with him last week to find out where and with whom creative office plays best.
Mike estimates between 60% and 70% of office tenants engaged in all types of businesses want creative features inside. About 30% of them, particularly those who employ primarily Millennials and are involved in tech and creative businesses, want campus-style environments, with indoor and outdoor recreational facilities, like ping pong, billiards and volleyball; social gathering places; and surface parking, Mike tells us. Many of those elements can be found at Habitat in Irvine, above.
He says many traditional office users, such as financial institutions and law firms, want creative features as well, like open ceilings and collaborative space and kitchens. Mike's own office is creative space. Large corporate real estate firms, including CBRE and JLL, have adapted the entire creative concept to their office spaces. San Diego's AERO, above, is a multi-tenant office space.
While the extent of creative features desired by tenants depends on business type and age of occupants, it also is dictated by how deep the tenant’s pockets go. “Creative office is expensive,” Mike continues. Tenant improvements (TIs) generally cost about $60/SF. Add another $60/SF for renovations, and the cost to ready a building for occupancy becomes $120/SF. That's Bixby's The Campus in San Jose above.
Add extras like outdoor recreational and social amenities (such as these at Habitat), and before you know it you’re up to $150/SF, he adds. “This plays in high-rent areas like UTC, Del Mar Heights and Newport Beach, but not inland.”
Hear more from Mike and other experts on real estate trends at Bisnow's San Diego Future of Real Estate event Thursday, beginning at 7:30am with breakfast and networking at the Sheraton Hotel & Marina, 1590 Harbor Island Dr, in Downtown SD. Sign up here!