Changing Office Trends Hold Major Implications for Future Office Demand

Like many other parts of our economy, the office market is going through seismic shifts in demand usage.  Private offices are out, and open workspace is in.  Some of the causes for this shift are technological.

Twenty years ago, no one used email; instead they fielded or made about 70 to 100 phone calls a day.  Today, most people field or make around ten phone calls a day and send, respond, or read 100 emails.  Hence, the need for private space–either in offices or workstations–has radically decreased.

Digital storage has lessened the need for physical storage.  Cloud based computing allows one to work anywhere.  The result is fitting more people into less space and thereby reducing the demand for office space.  Companies are figuring out that they can reduce real estate costs and, at the same time, create a more contemporary environment.  Office owners must focus on making their space more productive to be more competitive.

The higher density in office space movement exhibits the following:

1.  Working in open environments with less walls and partitions.

2.  More shared collaborative spaces: conference rooms, meeting rooms, break rooms, bigger kitchens and informal meeting areas.  Some of these areas are also used for focused work or making phone calls for those who need private space at variable times throughout the day.

3.  Amenities and Break areas: coffee refreshment areas, ping pong table, and Foosball.

Below is an as built plan of the West Los Angeles 10951 Pico Boulevard Third Floor, excluding the mezzanine, which is roughly about 8,000 square feet.  The plan shows 20 private spaces and room for about 12 workers in the open area.

As Built 8000 sq ft

As Built 8,000 Square Feet

This next space study shows an extreme move to density with five enclosed areas, including a conference room and room for a 115 workers in open areas.

Max Density

Max Density

A more optimal plan for a software company would involve a max density of 10 people per 1000 square feet.  This would include more disbursed private spaces such as a small conference rooms and workrooms with computers and phones.  Some open area would be converted to informal meeting and recreational areas that would bring density down to 5 to 6 per 1000, but still allow temporary scaling of people if required.

For an example, click on the link below:

28041 – 2013 04-09 Conference Room Options

Creative space helps alleviate the impact of this density, as volume and natural light give the sense of greater space despite the density.

Volume Mitigates Density

Volume Mitigates Density

Read the full story on changing office trends from the CoStar Group’s website here.

Micro-Apartments in the Big City: A Trend Builds

Luxe@Broadway 420 sq ft

Broadway@Luxe 420sq ft

Developers have begun to build micro-apartments to appeal to Gen Y looking for affordable housing in the City’s most amenity filled neighborhoods.  For example, NMS recently complete in downtown Santa Monica the Luxe@Broadway, which is composed of 300 square foot singles and 420 square foot one bedrooms.  These units incorporate boat and trailer interior technologies to create very efficient floor plans.  Surprisingly,  developers also built many 300 to 500 square foot single and one bedroom units in the early 1900s in Hollywood, Northeast LA, and around Downtown Los Angeles.  Many of the units could be re-purposed with more efficient floor plans and contemporary features.  This activity is all part of the emerging creative multifamily movement.

To learn more about micro-apartments, click here.

Homebuilders and buyers rush back in to Bay Area’s exurbs – San Francisco Business Times

It was the Economy Stupid. During the recession, many pundits pronounced the exurbs dead and likely to become ghost towns filled with obsolete McMansions.   Everyone was downsizing and moving back to the City center.  Not so fast.  In one of the first economies to boom since the recession, housing in the San Francisco Bay Area exurbs are making a comeback driven by commuters looking again for affordable single family homes.  Read this article below:

Homebuilders and buyers rush back in to Bay Area’s exurbs – San Francisco Business Times.



Silicon Beach Gains Major Tech Tenant

Silicon Beach in Los Angeles is once again enticing more tech and media companies to relocate their offices, or possible add another branch to this emerging hotbed.

Check out the latest article from the Los Angeles Business Journal to see what tech and media mogul will be joining the Silicon Beach ranks.

Read all about it here:  Patched In | Los Angeles Business Journal.

Single Family Home Rentals on the Rise

Read about the changing trend that Premier Property Management Group has discovered:

Single family home tenants are 18 percent more likely than apartment tenants to stay in their current homes five years or longer, suggesting that demand for single family homes, the fastest growing rental category, will be more stable than multifamily demand.

Check out the entire article from Real Estate Economy Watch here: Single Family Renters More Likely to Stay in Place |

Selling Creative Office in Downtown LA to Westsiders

Michael White

Michael White, Principal of Gensler Architects

On February 21st, 2013, Michael White, a principal at the architectural firm of Gensler, participated on a panel about creative office in Los Angeles.  He discussed Gensler’s move from the Westside of Los Angeles to Downtown Los Angeles.  According to White, when Gensler announced that they were moving their offices downtown, employees expressed shock and disappointment.

The senior executives noticed that many of the associates rent housing, instead of owning.  Gensler sold the downtown location by stressing that it would be much more affordable for the associates to one day buy in the neighborhoods near downtown than those on the Westside.  According to White, the housing affordability argument helped turn the tide of opinion to a positive one about the move to downtown Los Angeles.

Transit and Parking is Coming Near 10951 Pico Creative Offices at Sepulveda/Pico Expo Line, But Will Employees Walk?


Photo courtesy of Curbed Los Angeles

New and exciting things are happening in the 10951 Pico neighborhood! The Expo line will connect the area around 10951 Pico with transit to Downtown and Santa Monica, as well as providing 1,795 new parking spaces.  It will also feature a 250 space free Caltran commuter lot.  The Expo Station will be less than a half mile from the 10951 Pico Creative Offices (at Veteran Avenue and Pico Boulevard), making the walk just under ten minutes.  Compared to other cities, where a ten minute walk is nothing, LA Westsiders consider this trek an inconvenience.  Even a short five-minute walk borders as unbearable.  Los Angelenos just don’t walk from parking or transit to work.

Even now, there is plentiful free parking along the Expo line that is a five-minute walk from the 10951 Pico Creative Offices.  However, some tenants do not recognize such parking as convenient.

In Beverly Hills for example, some office deals hinge on parking spaces next to the elevator.  It can get that competitive.  More transit and parking is coming, but the big question is if employees will get used to walking back and forth from the parking located 5-10 minutes away from their respective work locations.  As office densities continue to increase beyond five per 1000 square feet, tenants and employees alike will need find locations near parking and transit, and learn to walk longer to work.  A University of Michigan survey found that teenagers in 2010 were much less likely to drive than teenagers in 1983, so maybe times are changing.

The mixed-use project proposed at the Sepulveda/Pico site includes on-site bike and car sharing facilities, bicycle parking, and will even offer transit incentives and free or discounted Metro Passes to residents and employees by the developer.  Once this project is finished, time will tell if those enticing amenities and incentives will encourage more people to use transit to get to work.To learn more, read about the proposed parking in this article.