PMI Properties and Bisnow to Host Summit on the Future of Culver City, LA’s Next Big Submarket

future of Culver City

PMI Properties and Bisnow is hosting on Tuesday, October 14, 2014 a summit on the Future of Culver City:  LA’s Next Big Submarket.  The event shall take place at PMI Property’s Eastham Station at 3525 Eastham at 5pm.

Many are saying that Culver City could be LA’s next big neighborhood—connecting the Westside to the Eastside, capitalizing on its central location and historic character.  The summit will dive into topics such as new developments under way and on the horizon, challenges and opportunities in the market, and what the City is doing to promote growth!

Other issues include What’s pushing Culver City’s growth? Is it its good stock of larger creative former industrial buildings and better housing options for employees?  How will the Expo Transit affect Culver City and how will the City capitalize on it?  What would the impact of City sponsored super fiber be on business? What is happening to bring amenities to the Hayden Tract and Jefferson corridor? What business are moving to and are attracted to Culver City? What is the new media cluster all about? How will Culver City compete against Playa Vista and Downtown L.A.? What new projects are being built?

Panelists include Michael Hackman, CEO of Hackman Capital, Thomas Wulf, Senior Vice President of Lowe Enterprise Real Estate Group, Andrew Weissman,  Councilman & former Mayor, Brad Gross, Executive Vice President of DTZ Brokers, Damon Juha, Partner with Freeman, Freeman, & Smiley, and Jeffrey Palmer, Partner with PMI Properties.

For more information and tickets, see below:

Future of Culver City – Event Information | Online Registration by Cvent.

The Fashion Industry is Helping to Fuel Growth of Los Angeles Creative Industries

fashion industry

The fashion industry may have sparked the birth of creative office in Downtown Los Angeles.  Nasty Gal, for example, an internet retailer of tween wear, took 50,000 in the Pacific Mutual building, a historic Downtown Los Angeles office building recently converted to creative office. The Fashion industry maintains a long history in Downtown that was dwindling but may not be rekindled on the creative side.

Surprisingly, PMI still continues to get demand from fashion  manufacturers for creative offices in Culver City, another Los Angeles outlet for the fashion design industry.

Many smaller consumer good companies today are more design, media, and marketing companies than they are manufacturers.  These companies design, prototype, brand and market their products from their creative offices in Los Angeles and outsource their manufacturing (overseas) and distribution.

Joel Kotin warns in his opinion article for the Orange County Register below (August 10, 2014) that Los Angeles is losing its dominance as a media center and is also thereby falling in its ranking of top world global cities.

However, Los Angeles may be growing as a design and marketing center for the consumer good industry because Los Angeles is rich in creative types who can design,create, market, brand, and sell.

 

Joel Kotkin: L.A. hanging on as a top global city – The Orange County Register.

You Need To Disperse a Variety of Private Spaces in An Open Office Environment

Work

A number of spontaneous activities occur during the workday that require the need for private spaces within an open floor plan. People need to take calls ,unexpectedly talk to a colleagues, engage in a heated conversations or conversation that should be kept private.

Although in some cases these conversations can motivate collaboration, in other cases, these conversations will cause disruptions to others.

It may be inconvenient to have to travel a distance to a conference room  for a short spontaneous need. Inconvenience encourages people to ignore etiquette and disrupt other workers.   We recommend telephone rooms and/or very small conference rooms dispersed in and  around the open work area so that these private areas are easy to get to and convenient.  In contrast, we would not recommend that these private areas be concentrated in just one part of the office.  Workers will be more likely to use the facilities to just take a short call or conduct a fast conversation if they are brainlessly in close proximity.

Open office plans give rise to a host of issues regarding noise, distractions, and privacy that needs to be addressed.  Knoll has provided a whitepaper on  establishing guidelines for appropriate open office behavior.  See below:

ules for Etiquette in the Open Office | Workplace Research | Resources | Knoll.

Why Snapchat May Be A Boon for Westside Office

Urban economists have traced the growth of Cities to the success of breakout hit companies.  One example was Microsoft’s relocation to Seattle and how that move resulted in the growth of prosperity of Seattle.  A breakout hit company attracts other companies, employees, venture capitalists to the area.   The hit company scales and hires more people and consumes more office space.  Service firms, lawyers, busboys,  and other workers are hired to accommodate this growth.   The new wealthy employees break off and form new firms within the area and hire even more people.

Now Snapchat may be the West side hit company that the LA Tech community has waited for in hopeful anticipation.  It user growth exceeds that of Instagram’s.  Read below.

 

Snapchat Hiring Massive Sales Team, Said To Be Raising $100M At A Near $1B Valuation To Pay Them.

Green Street Advisors Says West Los Angeles Office Market is Tops in U.S. For Rent Growth

Michael Knott, managing director of Newport Beach, California-based research firm Green Street, wrote in an e-mail that West Los Angeles is the top office market based on forecasted rent growth growth through 2017.  In contrast, he said San Francisco’s office market is now in the “fifth inning” of a nine-inning recovery, with “decelerating” growth that’s dropped its five-year outlook for rent increases to second in the U.S. based on revenue per square foot.

Office rent growth in San Francisco has been quite spectacular while office rent growth on the West side of Los Angeles has been slow.  San Francisco’s rent growth has produced a development wave that is the greatest since 1991, while the West side Los Angeles office growth consists of a few warehouse conversions. You can read the full article below.

San Francisco Leasing Slows Amid Office Boom: Real Estate – Bloomberg.

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.

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.

How The Supply of Creative Office Space Can Expand Very Rapidly

The 2001 LA Times article, “More Westside Office Space Turns Up in Latest Tally,” discusses a study in 2001 by Grubb & Ellis that showed a significant underestimated supply of Westside office space due to creative office conversions.

Warehouse conversions to creative office space are small and numerous, making it extremely difficult to track. Likewise, supply statisticians may also underestimate  the supply of creative office space.  Conventional office space can be converted to creative office space for $50 to $80 per square foot in two to eight months by opening ceilings, exposing the structural architecture, and installing creative office features.  Because it is so easy for traditional office space to be converted into a creative office, the supply of creative office space can expand rapidly.

In Los Angeles, brokers call these spaces “soft creative” because they lack the full intrinsic drama of single level converted warehouses but can still provide the creative purpose for certain companies.  Currently, in San Francisco, owners are working feverishly to convert conventional offices as well as older moth ball buildings into creative spaces and vacant land into new highrise creative properties.

When it comes to creative space production, we are all “Houstons”. The last time around, the real estate investment and leasing community failed to accurately account for the full amount of creative office space.  The industry needs to count the supply more accurately this time and hope the demand increases and sustains with equal fervor.

Understanding the Office-Less Company

Rachel Emma Silverman’s article, “Step into the Office-Less Company,” discusses a new kind of company where employees work from home.  Automattic is an example of one such company in which employees use social networking, cloud storage, and video conferencing to communicate with one another.

While Automattic does have an office in San Francisco, the company heavily relies on internal blogs rather than traditional office buildings.  Because of this, Automattic is able to reach out to a larger and selective workforce regardless of workers’ location and timezones.  This also allows work to be completed at any hour of the day, while the company saves enormously on real estate costs.

Companies like Automattic claim that employees are more effective in this type of environment without interruptions, but also complete work with less instructions.  While only 2.5% workers currently work from home, this new type of company is still worth noting.

For further discussion, the original Wall Street Journal can be accessed here as well as read below:

The Web-services company Automattic Inc. has 123 employees working in 26 countries, 94 cities and 28 U.S. states. Its offices? Workers’ homes.

At Automattic, which hosts the servers for the blogging platform WordPress.com, work gets done wherever employees choose, and virtual meetings are conducted on Skype or over Internet chat.

The company has a San Francisco office for occasional use, but project management, brainstorming and water-cooler chatter take place on internal blogs. If necessary, team members fly around the world to meet each other face to face. And if people have sensitive questions, they pick up the phone.

Web firm Automattic has 123 employees in 94 cities—and everyone works at home.

Having a remote workforce lets companies tap into a wider talent pool not limited by geography. Firms can also save money on real estate, though sizeable travel budgets may partly offset that.

Nobody knows for sure how many completely office-less companies there are or how fast their ranks are growing, but management researchers say such firms are still rare. Today, just 2.5% of the U.S. workforce considers home its primary place of work. But that number, which is based on census-data analysis, grew 66% from 2005 to 2010, according to the Telework Research Network, a consulting and research firm. And increasingly, employees at companies with physical offices are choosing to work remotely or forming virtual teams with colleagues world-wide, thanks to rapid advances in video, social-networking, cloud storage, and mobile technology.

Many far-flung companies also have nonhierarchical management structures, providing teams and workers the authority to make decisions and complete tasks with light supervision.
But working from home isn’t for everyone. “Some people hunger for the personal contact,” says Michael Boyer O’Leary, an assistant management professor at Georgetown University’s McDonough School of Business. Dr. O’Leary says that face-to-face contact is most critical for new employees or when people without a track record together launch a new project.
Other staffers have difficulty creating boundaries between work and home life, even missing the mental and physical transition of a commute, says Jay Mulki, an associate professor at Northeastern University’s College of Business Administration who studies virtual workers.

Automattic: How they make it work

  • Assignments with deadlines are posted on internal blogs.
  • Meetings with team members take place on blogs, Skype or Internet chat.
  • Internal ‘water cooler’ blogs enable workers to engage in virtual chitchat.
  • There is a ‘grand meetup’ once a year for all employees to gather face to face.

Source: the company

He says that one remote worker he studied got into his car every morning, drove around the block and then returned home to clock in.

Lori McLeese, who heads Automattic human resources, says that its hiring and orientation processes are key to creating a cohesive culture. The company requires top applicants to work on a trial project for a few weeks to see if they are a good fit. New hires, regardless of position, must work in customer service for three weeks to create a unifying employee experience and have direct customer contact.

The company lives by a philosophy of “overcommunication,” says Ms. McLeese, to help proactively quell any misunderstandings and provide workers with direction. Employees mainly transmit messages via internal blogs, dubbed P2s, which also act as a virtual water cooler. When misunderstandings occur with text-based chats, participants are encouraged to pick up the phone.

But because staffers are in so many time zones, work is often done asynchronously. Team members work their own hours—the company has a lot of night owls and early risers—to meet project deadlines. If someone misses the mark, the team leader or another staffer will reach out to the employee to figure out what went wrong.

The company also organizes regular face-to-face get-togethers of teams, allowing workers to fly to meet each other in convenient locations, and an annual, week-long “grand meetup” for all employees. Ms. McLeese says that after long stretches without seeing each other face to face, the meetups can be emotional. “People are giving each other hugs at the airport,” she says.

Mat Atkinson, the chief executive of the design-review software company ProofHQ, says that managing “distributed” teams requires 25% more effort than a face-to-face team would because managers must pay closer attention to whether workers are motivated and fully understand tasks and business processes. “There isn’t the opportunity to just pop into someone’s office,” says Mr. Atkinson, who is based in London and has 32 staffers based in 17 cities around the world.

But Mr. Atkinson says that employees are more productive because they have no commutes and fewer interruptions. And he says that being virtual costs about 50% less than having fixed real-estate costs.

Kalypso LP, an innovation consulting firm, has 150 employees around the country and in Europe but no corporate offices, says founding-partner Bill Poston, who works from his home in Boerne, Texas, when he is not at client sites.

When the firm was founded eight years ago, Mr. Poston says the decision to go office-less was financial. But now, being virtual is a matter of choice, though he points out that the company isn’t a good fit for people “who are uncomfortable with ambiguity.”

Mr. Poston also says that employees are far from isolated. Workers communicate constantly via instant messaging and email. And teams of consultants see each other almost daily when meeting with clients. The company also flies employees to an annual meeting in September, and it transports workers and their families to “family fun” weekends every June. In addition, employees can fly to meet each other whenever necessary.

Not everyone believes in virtual companies. Last year the founders of Zaarly Inc. debated whether to operate virtually or open an office for the fledgling online marketplace for local services.

The firm opted for the latter, says Shane Mac, director of product for Zaarly, which now has 43 employees, most of whom work in the company’s San Francisco-based office.

Although the firm has some remote employees, Mr. Mac says that making decisions is faster when someone is sitting next to you, and it’s easier to keep employees in the loop and brainstorm together over a whiteboard. “You can’t create true serendipity over IM,” he says.

To find out more information on this topic, contact the author of this article, Rachel Emma Silverman, at rachel.silverman@wsj.com.