Associations Moving Away From CBD, Adopting More Open Offices
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The hundreds of associations headquartered in the nation's capital are a segment unique to DC's office market, and the decisions these organizations make — both in location and office style — can be important indicators of where the market is heading.
The people who have worked on some of the biggest association moves recently see a clear trend of groups moving away from DC's central business district to more emerging markets, and also toward more open-space collaborative office styles.
The National Association of Broadcasters has been in its Dupont Circle building since 1969, and in the neighborhood even before that, but it recently decided to move away from the traditional hub of associations to the Capitol Riverfront neighborhood. Monument Realty is building NAB a 10-story building that the association will purchase upon completion and occupy seven floors, leasing out the remaining three.
"The largest driver was the proximity to Capitol Hill," NAB chief financial officer Joy Whitlow said. "The traffic patterns in the city have changed. It's taking longer for our staff to get to the hill. When we have events and invite Congress members or their staffers to our building, it's harder to get them to come. We wanted to get closer to the hub of our activity."
In making its decision, Whitlow said NAB drew a circle around the U.S. Capitol with a one-mile radius and Capitol Riverfront made the most sense. She expects other associations are beginning to make similar calculations.
"I really would expect more to follow," Whitlow said. "There’s just so much opportunity there in terms of new space coming up, development of the neighborhood and the amenities it offers as well as proximity to the hill."
DC's other emerging waterfront destination, The Wharf, is also beginning to pull associations away from the CBD. The American Psychiatric Association is moving to a 63K SF office at The Wharf's 800 Maine.
Arent Fox partner Richard Newman worked on both the NAB and APA deals and said he has more association clients looking at locations outside the CBD. He sees the geographical shift of associations as one of the largest sea changes happening in the market right now. The groups are focused on saving money, he said, and also finding locations to get visiting members excited.
"I think it is a marker of the desire of membership organizations to be located in places where their members are going to want to come and visit," Newman said. "For organizations with large numbers of members, the buzzword right now is engagement with members and being in a lively environment helps that."
Another growing trend among trade associations and nonprofits is the move toward more open-space office layouts. The Urban Land Institute recently moved from a space composed of 60% closed offices to a new office at 2001 L St. NW that is 100% open with 80% of the organization in unassigned space. Studios Architecture principal Marnique Heath, who worked on ULI's new office, said the shift has been very successful.
With the ability for employees to do much of their work remotely, the importance of the office has become much more about engagement and collaboration, Heath said, and open space allows for a smoother workflow.
"It’s about providing people with that kind of environment where they can engage where it’s much more active and where you can see what’s happening," Heath said. "That way you can better understand what various parts of the organization are doing and have access to the leadership so information can be shared much faster."
NAB has not designed the layout of its new office yet, with its move still two years away, but Whitlow said she is closely watching the shift toward more collaborative open layouts. The association's current layout is roughly 75% closed offices, a number she expects to be much lower in NAB's new space.
"I expect there will be some push and pull in helping people understand benefits," Whitlow said. "Hopefully through our change management process we’ll be able to get folks on board with the new style and appreciate the benefits."
Newman has also seen the trend toward open office design, but he said some companies have found there is such thing as an office that is too open, and have begun to seek a balance between traditional closed offices and new collaborative spaces.
"There is beginning to be some pushback on that because of privacy concerns," Newman said. "It's not that they’re moving away from it but they’re moderating it and balancing. Instead of going whole-hog all open space it’s much more of a mix."
Whitlow, Heath and Newman will discuss these trends at Bisnow's Real Estate Strategies for Associations and Law Firms event on Tuesday.