The Office Revolution is Real. Here's Why.
In previous cycles, office space increased in quantity as companies demanded more. That's still true, but in today's Seattle, office space is changing in quality—a genuine revolution in the market, according to the speakers at our Seattle's Office Revolution and the Rise of the Tech Sector event.
The revolution started with the tech sector, our speakers noted, and tech is still leading the charge for innovations in space. Or rather, innovations in a sense of place, because creating a distinctive place is now critical to the success of office properties in Seattle—both new developments and older buildings leveraging whatever uniqueness they have to offer compelling space to the market.
Snapped: Paladino & Co director Dina Belon, Lake Union Partners principal Joe Ferguson and Hines managing director Ty Bennion. More specifically, the demand for open floor plates and high ceilings in large blocks of office space—just to name two popular design elements and a size requirement—is practically a given these days, our speakers noted. So is the urge to stock space with a variety of amenities. The goal, after all, is to attract talent to a space, and keep it there because 1) the space works as a workplace and 2) because it's such a cool place to be.
Talon Private Capital senior leasing director Wende Miller and Impact Hub Seattle managing director Lindsey Engh. That's a tricky balance to achieve, our speakers said, since not everyone works well in completely open space. Thus a lot of tenants want flexibility built into their space: plenty of open offices, of course, but also meeting rooms, break and rec space, and some privacy areas. One increasingly popular feature illustrates the trend very well: phone booths. Not the kind Superman used to use, but essentially small privacy spaces for talking on smartphones.
Snapped: Seattle Pacific Realty partner Jeff Rosen, who moderated, Martin Selig Real Estate owner Martin Selig, and MG2 Architecture principal MJ Munsell. Successful office space is more than just interior configurations and amenities, our panelists explained. It's about a building's location—its place in an interesting and amenity-rich urban environment. Fortunately for the local office market, Seattle offers a number of increasingly unique urban environments that Millennial workers crave.
The game doesn't entirely belong to new office space, either, our speakers posited. Older Seattle properties can be redeveloped to meet the needs (and wants) not only of tech companies, but also other, more traditional tenants, such as law firms and insurance companies. The demand for space is strong enough so that older properties are going to get their share of tenants. Not only that, some legacy buildings have unique design qualities that new structures aren't going to have—and that attracts some companies.
Is Seattle at risk of overbuilding? Not now, our speakers concurred. In some submarkets, like South Lake Union, where Amazon has hoovered up space right and left, demand is also very strong among companies that don't happen to be Amazon. Spec buildings these days tend to lease up during or even before construction. There's some long-term risk that Amazon will quit absorbing space as it has been, but that's not an immediate worry, since the retail giant is still in a vigorous growth mode.
