Getting Clarity: The Next Generation of Office Space
This article is included in the Great Things: Issue 5 edition of the DPR Newsletter.
Flexibility and Creativity
For more than a year, the headlines have ranged from “The End of the Office” to “Workforce Anxious to Return to the Office” with grand pronouncements about everything in between.
Stephanie Long, Managing Director of IA Interior Architects, could only shake her head at the hyperbole.
“All of our clients have a completely different reaction, viewpoint, and opinion about what’s next for their offices,” said Long, whose workplace clients large and small range from technology to finance and most everything in between. “Once or twice we’ve heard the more extreme idea that ‘the office is over’ with a desire for the complete transition to a work-from-home culture. We’ve also had clients wanting their teams to return to pre-Covid operations as soon as possible. Mostly though, the thinking is somewhere in the middle. It’s totally a spectrum.”
In fact, more than one year after the World Health Organization declared the coronavirus outbreak a global pandemic, perhaps still the only certain thing for the future of the workplace is that nothing is certain at all, save the idea that it is transformed forever. It was a theme echoed throughout DPR’s research with its own subject matter experts and other thought leaders in the commercial real estate world, including Katie Walker, Associate Principal and interior designer from STG Design, an architecture, interior design, and planning firm with a multitude of clients from office to education to healthcare, and a wide variety beyond.
“... offices will still be essential for collaboration, socializing, making connections, and company culture. We’re really thinking now about maximizing collaborative spaces in the next generation of office space.”
—Katie Walker, Associate Principal, STG Design
“We need to be creative. We’re thinking in terms of three main scenarios here. Post-vaccine, when things will ‘go back to normal,’ more of a hoteling approach where employees no longer have permanent workstations and may even adhere to an A/B scheduling approach, or a hybrid of the two, somewhere in between,” said Walker. “We know that working from home will be much more prevalent but that offices will still be essential for collaboration, socializing, making connections, and company culture. We’re really thinking now about maximizing collaborative spaces in the next generation of office space.”
Kelly Givens, Vice Chairman specializing in workplace demand engineering at global property advisor Savills shared, “We met with a lobbying group for financial services in DC who are of the opinion that they need people in the office as close to five days a week as possible, whereas one of the larger tech companies in the world think that maybe two days a week is the right balance.”
And why, with even a year under the collective thinking caps of tenants, landlords, brokers, developers, designers, and contractors, is there no clear solution for the future workplace in a pandemic-centric world? Because one size does not fit all, or even most. Considering company size, culture, leadership, lease length, demographics, individual roles, geography, industry, technology accessibility, financial resources, commutability, even political sway and vanity, the resounding consensus is that there isn’t one solution when it comes to a pandemic-perfect workplace environment. The good news is that some trends in design are emerging – as are ways general contractors can best support them.
“Flexibility is key. There’s not one answer and everyone has a different plan. It’s not data or facts, but culture that is driving decisions right now,” said Long.
“Flexibility is key. There’s not one answer and everyone has a different plan. It’s not data or facts, but culture that is driving decisions right now.”
—Stephanie Long, Managing Director, IA Architects
To that end, design and architecture firms are exploring the questions, what is the purpose of the office? How do we use this space? For a team? An individual? What resources are needed for onboarding or mentoring? Are these events effective online and virtually, or only in person?
“We’re stepping back and asking our clients to really take an objective analysis of their workforce as well,” said Long. “How do our teams work? What do they need? How can we support them?”
Regardless of size and shape, most organizations are finding themselves with one major obstacle to overcome as they consider reopening their offices. “Right now, most of our clients are standing with their feet in two places, actual vs. virtual,” said Long. “How do we reconcile the two? We don’t really know how to do that yet.”
Back to (the Future) ‘Normal’
If anything can come close to being a safe bet in these ambiguous times, there is unquestionable alignment that the office is not dead – just different. Despite murmurs of transitions into fully work-from-home scenarios, there is otherwise a general belief – and relief – that the physical workplace is indispensable. While it has become overwhelmingly clear that every company will take a tailored approach, the most notably desired option from clients across all industries is a hybrid workplace experience.
"No two answers are going to be the same. That’s what is unique about the hybrid workplace of the future."
—Kelly Givens, Vice Chairman, Savills
“While every company we are engaged with is struggling to find the right balance to its occupancy solutions and everyone has a different formula, the pandemic-era trend is a hybrid,” noted Givens. “Not many workplace environments will have 100% assigned or unassigned workspace anymore.”
He also noted that in the future, the occupancy of office space will no longer be determined by job functions as it has been historically, but by lifestyles and preference.
The Hybrid Office
“No two answers are going to be the same. That’s what is unique about the hybrid workplace of the future. Everyone has a different workforce, different resources, different commutation patterns, different goals. We’ll begin to see people using the office more as a destination for collaboration, focus work, teaming, training, and mentoring, not individual work. The office will become a center of energy and productivity, creativity, socialization, and culture. That’s missing right now as so many are working from home, but it’s still important.”
DPR's Eric Lamb, who is supporting the firm's Silicon Valley office consolidation, said “We’ve had a lot of conversations about more people working remotely post-COVID, and a lower need for personal workspaces in the office. Customers are really wanting to drive the office space to be a more collaborative environment for conference rooms and breakout areas, as opposed to lots of individual workstations,” he said, noting that a large number of organizations are leaning towards floating desks. “I think that’s one of the biggest changes we’ll see in office spaces. When employees now only occasionally come into the office, many will no longer have a permanent workspace.”
Lamb added that longstanding benchmarks of office space to conference room ratios will change, and there will indefinitely be a higher percentage of square footage dedicated to collaborative spaces and conference rooms in the next generation of office space. “It’s interesting because we’re trying to define something that doesn’t really exist yet.”
The Road Ahead
While there is a tendency to believe that within a few years, offices will be ‘back’ to a new normal, there’s a long road ahead to get there and several considerations to examine before the workplace, traditional or otherwise, is occupied again.
“When we’re looking at offices reopening, we think about four major factors in what that will look like,” offers Todd Burns, President of Project and Development Services at global real estate services firm JLL:
Can people access the space safely and do they feel safe in the space?
Is it easy to access while maintaining social distancing protocols? What are the commuting patterns and challenges?
How is productivity affected working in an office vs. working from home? What are the advantages and disadvantages of both? How do they vary by job function?
What does life look like at home when caring for children or elderly, or navigating other family members’ schedules and needs who are living in the household?
This has left some wondering: are new satellite locations outside of corporate offices a thing of the future, too? The short answer for now is probably not.
“Clients still believe in the value of the office,” said David Providenti, Vice Chairman and head of financial consulting and strategy at Savills. When speaking on the draw to the vibrancy, excitement, and energy of major professional hubs such as San Francisco, Chicago, and New York, he noted, “We are likely going to experience an increase in work-from home deployment based on COVID-related commutation challenges and possible small suburban outposts here and there, but we likely won’t see many large campus developments outside of major cities. Corporate offices will remain in large urban areas because of the quality and depth of talent pools available in such areas.”
Though it may be apparent that building or leasing additional space outside of company headquarters is currently not a prevalent strategy, it is still an option that some companies are considering, and a few, even implementing said Andrea Weisheimer, one of DPR’s commercial project leaders. “It’s really an individualized approach, but we’re hearing the idea more and even seeing a handful of outposts pop up, particularly in places where commuting and mobility have become more of a concern during the pandemic.”
While many are hopeful to bring people back to the office, not everyone is in a hurry for major overhauls to their spaces.
“Any tenant who is making real estate decisions during the pandemic needs to build flexibility into the solution so that their workforce can migrate comfortably back into the workplace,” answered Givens, referring to what companies are considering related to their short- and long-term lease agreements. “Desire for options to contract, expand, or repurpose certain workspace into more activity-based areas is what we’re seeing right now.”
Regardless of remaining lease length, in such an uncertain and unpredictable global environment, many organizations have not been quick to jump into permanent decisions. They’re focused on near-term approaches and long-term flexibility. Companies are rethinking lease terms, making smaller-scale social distancing and sanitation changes, and exploring creative and flexible design solutions before making lasting commitments.
Said Givens: “We think it will be a year to 18 months before people really figure out what their workforce preferences are and therefore how their new workplaces will look and perform.” Because data on adoption rates, performance and employee satisfaction simply doesn’t exist yet, it’s abundantly clear that flexibility in planning is a must.
“In a short-term lease situation, firms are generally not making major renovation decisions or spending significant money to redevelop the workspace. The focus has been on the health of the workforce and sanitizing the workplace and its last-mile pathways to and from the space,” remarked Givens. “Right now, working from home is the safety mechanism.”
While many tenants in short-term leases may not be quick to undertake major renovations in their leased spaces, they do have the advantage of negotiating power in looking for new spaces, said Burns.
“Shorter-term leases have a lot of leverage in the marketplace to get into a new-generation building or to renew in place with negotiated space modifications,” he said.
As tenants deliberate their options for the coming months, they cannot ignore the need to find solutions for safe, timely and cost-effective ways to bring their workforce back into the workplace, even in a short-term scenario.
“Not far into the pandemic we were already seeing clients focused on a post-vaccine view rather than short-term solutions,” said Long. However, pandemic guidelines have required tenants in all lengths of lease agreements to make smaller, immediate changes to the workplace, some of which she believes will soon no longer be regulations, but a way of life in the ‘new normal’ of office space. “Plexiglass partitions, floor circles and tape, and social distancing signage and protocols, temperature stations, these are all very immediate solutions that will likely fade away. I’m very optimistic that we’ll go back to business as usual, though some short-term solutions will most certainly become standard protocols.”
"Business as usual"
Long remarked that ‘business as usual’ will include new cleaning procedures, surface treatments, door functionality such as push doors and elbow handles, modified social distancing guidelines, and touchless and app-based technology on elevator doors for example.
Walker suggests low-cost furniture, fixtures, and equipment (FFE) modifications such as storing excess furniture in unused building spaces will help employers better adhere their workplaces to current social distancing guidelines.
“This landlord-tenant partnership makes use of otherwise unoccupied space and generates income for the landlord, while it saves the tenant from the more expensive challenge of reselling furniture while social distancing guidelines are still in place,” she said.
“Swift, low-cost modifications like the transition of ground-level outdoor spaces to collaborative work areas, adding phonebooths–these used to be trendy ideas but now they’re here to stay,” Walker said.
More permanent options for altering HVAC systems, movable walls, power supply modifications, and other longer-term solutions certainly exist for tenants in short-term leases. These tenants, however, are tending to lean towards low-cost, fast and flexible implementations for expiring leases and what is still an unpredictable near-term future of the pandemic.
“It really depends on so many factors, the solutions that companies are considering in their leased spaces right now,” said Weisheimer. “Along with highly increased sanitation practices, cleaning services, and signage and wayfinding, we’re seeing clients exploring options for square-footage reductions as they prepare to negotiate the remainder of their short-term leases or considering rental of less space in new locations when their leases expire.”
Tenants in long-term leases are finding themselves with the same pressures for an immediately safe and healthy workplace as those who are closer to lease-end, though their options are slightly different and perhaps even more plentiful. Not only is there more flexibility in the alteration of physical spaces, but in legal and contractual agreements as well
“Long-term wellness investments are better for organizations now more than ever.”
—Jim Susman, Principal, STG Design
“Given the tenant-favorable dynamics that are emerging in almost every market, companies that have visibility on long-term occupancy decisions will look at their lease arrangements in very different ways now,” said Providenti. “Obtaining favorable economics will only be part of the tenant ask. Just as important is increased flexibility, contraction rights, terminations rights, givebacks for rent relief, negotiated implementation of wellness standards into leased space, and even early lease terminations if heightened wellness standards aren’t met.”
Long-term tenants must also consider physical modifications to the workplace to create safe and accessible office environments. As they do, resiliency and flexibility are key.
While the past year has been anything but predictable, the time spent in pandemic conditions has opened eyes and minds to the need for a new kind of workplace resiliency. Open, collaborative spaces are essential, and they must also endure through whatever the future may hold.
“Reconfiguring flexible spaces with floor core in the middle of an open office now, that in two years can be converted to a hard wall office, is something that long-term tenants have to think about,” said Walker. “No one can possibly know what to expect regarding future virus and pandemic circumstances.”
Firms like STG Design are introducing ganged walls, conduit and junction boxes in ceilings, power grids in floors, and centralized AV walls as options to explore with clients to create solutions for open and socially distanced spaces that are still highly adaptable for the future.
And some solutions for a nearly pandemic-proof workplace are not only practical but savvy, even in a world without the threat of a global pandemic. “Long-term wellness investments are better for organizations now more than ever,” said Jim Susman, Principal at STG Design. “Upgrades for air quality, outdoor space, cleanliness—large-scale modifications that will make the workplace healthier, increase productivity, a place where health and wellbeing and retention increase—these workplace elements are good especially now in the midst of a pandemic, but countless studies have proven that they will endure as good investments in the long run no matter what.”
“More access to natural light and fresh air are proven to be highly beneficial to productivity and attraction,” said Long. “Many businesses were already heading in the direction of sustainability certifications for employee retention and health reasons, but our clients investing in these tools in reaction to the pandemic are also now seeing it from an infrastructure flexibility perspective.”
For clients in accommodating climates, creativity of outdoor space use will also prove advantageous. “In Los Angeles, for example, we’re seeing many clients who are renovating traditional balconies and terraces meant for breaks and occasional fresh air into formal collaboration and meeting areas,” said Susman. “Especially now, there are more and more conversations about outdoor areas being considered rentable office space by building owners.”
Though not every organization might have the good fortune of terrace or balcony availability, Susman also noted that retractable walls and garage door-style walls are also part of the next-generation dialogue.
In theory, outdoor space conversions are a popular idea. Though Weisheimer does note some considerations for tenants who may be contemplating the option. “Thinking along the lines of security, how do you keep your space secured? And fire codes, how do those change? What happens if there’s an unexpected downpour or a very windy day? We would just advise clients to think all the way through every scenario, regardless of climate and location.”
And while not the most common option, some long-term tenants or companies who own their office space are considering more square footage. “They’re actually adding more space to their offices,” said Weisheimer. “For example, one multinational technology company doesn’t want their employees to feel crowded or unsafe, so they’re creating more room for them to spread out and comfortably adhere to pandemic-appropriate guidelines.” She said that prior to the pandemic, the organization was already well on its way to implementing a stronger overall wellness initiative in their new office space. Now, in addition to social distancing augmentations, adding more square footage also allows the organization to incorporate small group focus areas and collaborative spaces such as ‘creativity rooms’, in lieu of larger spaces where more people might congregate.
Embracing Thoughtful, Collaborative Delivery in Unprecedented Times
“The industry has been talking about this for years, but it’s now heightened during the pandemic… the obsolescence of buildings. It’s happening faster now,” said Susman. That’s one thing we’ve been counseling—if you’re too tepid about adapting you might get left behind.”
In the state of a global pandemic, it is apparent that companies must be swift in revolutionizing their workplaces, but just as essential, they must be acute in their decision making.
“We may start with a design concept for a tenant but end up reverse engineering,” said Walker. “Considering material availability and shortages, lead times, shipping costs, planning, and price increases amidst a pandemic, the perspective of a general contractor is essential. It makes more sense to think about how we build something and then talk about how we design it.”
This certainly begs the question, is it smarter to work backwards when tenants and landlords are considering space adaptations? DPR’s team believes so.
“There has never been a better time for office tenants and property owners to consider more collaborative delivery, including design-build,” said Weisheimer. “We’ve long believed in the benefits of more integrated forms of project delivery, and this is the perfect time for customers to take advantage of it.”
For example, should a client decide to move forward with conversion of a structural outdoor space, terraces and balconies currently meant for casual interactions and quick breaks during the day may need to be structurally redesigned. There are considerations of new load requirements, changes in physical entrances, rapidly increased flow in and out of the building interior, and reconsidered thresholds.
“There has never been a better time for office tenants and property owners to consider more collaborative delivery, including design-build.”
—Andrea Weisheimer, DPR Construction
“We must think very differently now,” said Susman. “These spaces will be used much differently, and by many more people. Between architects and contractors there’s a new way of thinking collaboratively, and we must reason in terms of detailing. Teamwork is iterative between contractor and architect.”
“From a pricing perspective, we’re looking to general contractors to understand what it means to use a higher MERV filter, what it means to use in-duct UV filtration. What are the cost implications of tearing walls down to adhere to social distancing guidelines, or relocation of power to accommodate walls that will move again and again? Pricing and creativity form the real partnership with the general contractors to help clients understand their options now, instead of build back services later,” offered Walker.
What's Next? Patience, Partnership, and Resiliency
There is a natural urge in the face of a complex situation or major disruption to try to act fast and simplify. Though when it comes to what the next generation of office space may look like, research points to more opportunities by embracing the nuances and evolving safety protocols. The variety of factors affecting the ways different stakeholders are approaching decisions on both portfolio and location-by-location levels mean there is considerable room for creativity across the project delivery cycle. Collaborative approaches will be the key to unlocking these solutions, which could take a variety of forms from more use of outdoor space and natural air ventilation to reimagining how space itself functions in an office.
Despite a multitude of proactive and reactive ideas for envisioning the next generation of office space, the fact remains that we simply don’t know what or when the next disruption will be. By working together with partners throughout every project, we aim to make sure the future of office space will be resilient when it arrives.
Images throughout this piece were taken prior to the COVID-19 pandemic.
Contributing photographers included Peter Molick, Gregg Mastorakos, Chad Davies, and Judy Davis.
Posted on April 7, 2021
Last Updated August 30, 2022