Four Trends Affecting The Office Of The Future
From hotel-like office settings and food halls to parking issues and vouchers for shared vehicles, here are four trends experts at the Atlanta Office of the Future event say they expect to see moving forward.
1. Where Is Your Amenity Base?
Atlanta Property Group partner Austin Chase said the firm's Securities Centre — which hosted Bisnow's Atlanta Office of the Future event last week — will be getting an attractive amenity base in part because Mill Creek Residential is moving forward on Modera Prominence, a 320-unit apartment project off Piedmont Road in Buckhead. The project, next to the Prominence in Buckhead office tower and across Piedmont Road from Securities Centre, will include more than 20K SF of restaurant and retail space, providing a nearby amenity base for the buildings' tenants, Chase said.
Retail is becoming critical for office landlords in today's market, Georgia Tech Executive Director of Real Estate Development Tony Zivalich said.
“You may have a stand-alone office building, but if it's not close to the amenity bases that people are wanting, it will struggle,” Zivalich said.
The common areas of office buildings are starting to develop more of a hotel lobby feel, and landlords are providing amenities more akin to luxury hotel operators, including collaborative space, coffee purveyors who can serve drinks after hours and elaborate workout facilities.
“We're way beyond the days of, 'Hey, does this building have a fitness center?'” WiredScore Head of Atlanta JD Jeske said. Even Seven Oaks Co. is planning a food hall at its newly delivered 4004 Perimeter Summit tower in Central Perimeter, CEO Bob Voyles said.
2. Vouchers In Exchange For Parking
As a parking space crunch gets worse in markets like Buckhead, Midtown, and even Central Perimeter, landlords are beginning to eye alternatives for tenants. Namely, vouchers that tenant employees can use for Uber and Lyft, Colliers International Atlanta Senior Vice President Jodi Selvey said.
“Instead of free rent, they're going to be getting those Uber and Lyft vouchers,” Selvey said.
3. Tech Infusing All Of Office
Smart technology is growing into more aspects of office building — not only on employee tablets or iPhones, but also with office lighting and HVAC systems. That was the message from Igor Director of Business Development Matt Conger and Newcomb & Boyd partner Donny Walker.
4. Sticker Shock Will Only Get More Shocking
As demand has outstripped office supply in Atlanta, rents have gone up. Add to that the escalating cost of construction, and rents are only going to get worse for tenants, Selig Enterprises Executive Vice President Chris Ahrenkiel said.
To build an office tower on top of podium parking in Midtown today will cost a developer around $500/SF. That equates to about $40/SF in net rents, Ahrenkiel said. But with construction costs predicted to steadily increase, by 2030, that same building could cost a developer $700/SF. That puts rents at more than $55/SF, he said.
Companies also want landlords to provide more services to them, which is adding to rents.
“I think if you're opening discussions, the conversation shifts. [Tenants] understand now what they're getting,” Trammell Crow principal Brandon Houston said. “There is a flight to quality. Service is a cost.”
