Why Portland Will Stay On The Cutting Edge Of Office Space

When it comes to office space, Portland is still on the cutting edge in terms of space configuration, amenities and the city's urban texture. But with costs rising for new construction and adaptive reuse, will the market keep its edge? 

The speakers at our Portland Workplace of the Future event Tuesday thought so. Landlords will find ways to provide what tenants want, because there is no going back to older office space.

The answer to what tenants want is not so simple.

Daimler Trucks North America recently moved into its new Swan Island headquarters campus, including a new nine-story office building on the Willamette River. The space represents movement from a corporate culture of heavy industry to high-tech, head of real estate Matt Markstahler said.

Mostly, the transition to a more open-space format has gone well, he said. One reason is because the move was carefully managed, with a lot of input from employees, and a lot of change management done. Not everyone is in love with the open format, but part of the design includes many smaller private conference spaces, which helps balance the openness with the need for some privacy.

Ankrom Moisan Architects principal Sabine O'Halloran, whose company designed the Daimler space, said the new work environment celebrates the site. Every aspect of the facility — workspaces and conference rooms, along with amenities such as a fitness center and a bike storage room — was designed to achieve an optimal employee experience. 

Part of the project reconnected the public greenway trail along the riverfront, not only for employees, but to enhance the location’s natural beauty, she said.

Unico Properties senior vice president Brian Pearce said corporate culture is driving a lot more space planning as a factor in real estate decisions. But there is still a tension between CEOs, who are looking to attract and kept talent, even if it means spending a little more on amenities, and chief financial officers, who are looking to contain real estate costs.

Yet the demand for amenities is pervasive, and companies who want the best and brighest will spend a little more for them. The drive is also on to provide amenities that are unique to a building. Pearce cited an example of a Unico building in Seattle that converted an unusually long space into a private bowling alley and bar for tenants — and it became a prime attraction for a number of new tenants.

Macadam Forbes principal Stu Peterson, who has done a lot of work in the Portland suburbs, said the suburbs can be competitive for tenants. The character of the suburbs is different, and so are the tenants who want to be there, but there are companies that still prefer them to the city.

Greater Portland, city and suburbs, is a strong draw. He said one corporate relocation to the Portland suburbs involved hiring a sizable number of mechanical engineers — people in their 30s or older, not footloose millennials. That company had no trouble attracting skilled employees from other parts of the country to come to Portland, because the region is so attractive.  

The event's View From the Top panel said creative office is hot in Portland, but so is traditional office space. Different tenants want different things, and the end result is that there will be a lot of open space, but also some private space, especially in the form of conference space. 

Everyone expects smaller offices, whether the emphasis is on open-plan collaborative space or not. Corner offices are gone, and now everyone has roughly the same size space, from CEO down.

Urban Portland is considered an amenity by itself, the speakers said. What goes on outside the buildings downtown is just as important a consideration as any of the amenities in the building.

For new and up-and-coming companies, that is especially true in the Central East Side. Demand is strong for the adaptive reuse space that the area provides. Construction costs are up, so it is more challenging to provide space there for smaller companies than it used to be. Even so, the speakers said, it is important for developers and owners to do so, since smaller companies are an important part of the creativity and drive of the Portland market.