Real Estate Trends Associations Need To Watch
DC temps have been so cold, but we found a way to stay warm: Bisnow brought together association execs and real estate experts from CBRE and banking experts from EagleBank to talk real estate trends and workforce changes. (Add in a rabbi and you've got the the makings of a dirty joke.)
CBRE EVP Manny Fitzgerald says the change in the workforce is forcing associations to think about their workplace strategies: being more efficient with space, while promoting collaboration and productivity. The next generation is more receptive to living in an open environment, which is more noisy and sitting side by side rather than in closed offices. Manny, who focuses on associations and nonprofits, says the federal government has been going to smaller and smaller square footages per employee (125 SF at the moment), which trickles down to other industries. The trick is to create an environment where workers are excited and inspired to come to work.
Manny says he’s helped several associations with their relocations, some going to suburbs like Crystal City and some moving within the city. State Services Organization executive director Steve Roberts says a lot of organizations want to be close to the Capitol and other associations. But Steve says it isn’t easy to move from nonprofit status in DC to nonprofit status in Virginia or Maryland from a tax standpoint. He’s also seeing a 20% to 30% increase in real estate assessments in DC, which means an increase in real estate taxes. (Nonprofits that own their own buildings are exempt but those that lease are not.)
Millennials are looking for meaning in their careers, rather than just skills they can add to their résumé, says American Institute of Architects' Mary Fitch, who runs the organization’s DC chapter. The challenge for associations is making sure they’re providing that meaningful experience. It may mean grooming them for higher positions as Baby Boomers retire or letting them take over certain projects or divisions within the organization. Mary says AIA’s DC chapter moved out of an old Dupont Circle brownstone into a storefront to change its image and to become more inviting to a wider population.
One of the big workplace trends is hoteling, says CBRE SVP Brad Wilner. It’s shared (not permanent) workstations for employees. (So those framed photos on your desk may not be your children. Double check.) Combined with telecommuting, it allows the organization to have less space and provide its employees more flexibility.
The hoteling trend means a bigger challenge for leadership to help employees feel connected to their mission. That’s where branding comes in. Airports Council International-North America CEO Kevin Burke (right) says when he took over the organization a year ago, a lack of decor in the office meant there was hardly a hint of the organization’s mission. Now there are pics of airplanes and airports and runway strips on the rugs.
Stan Gryskiewicz runs the Association for Managers of Innovation, a virtual organization. He’s not grappling with real estate issues, but one of his challenges is that he can’t push membership fees any higher. He tries to maintain the valued intimacy at the group's biannual, face-to-face meetings, which inspire an open idea exchange. EagleBank VP Mary Anderson offered some economic insight, predicting that if the Fed moves rates, it could trigger a slowdown in the economy. Rumor has it rates could move in July.
US Capitol Historical Society president Ron Sarasin—who educates the public about one of DC’s most iconic pieces of real estate—told us the scaffolding on the dome will be there another three years.
Big thanks to our partners EagleBank and CBRE, as well as Del Frisco's Double Eagle Steak House, for hosting us.
Bisnow holds Association Roundtables several times per year. If you're interested in partnering with us for the next one, please contact Bisnow's Chris Wainwright.