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.

The Future of Office Workspace: Less is More

Some may argue that office space in West Los Angeles has become too plentiful. Soft markets, when there is an excess of supply over demand, occur about 80% of the time.  Conversely, tight markets occur about 20% of the time.  Los Angeles brokers and building owners have to face the reality that demand has been decreasing over the last two decades.  This industry is very mature, and it may be time for a change.  As this article from CoStar Group points out, one of the changes that should be made in office design is to accommodate the needs of the next workforce generation.  Unfortunately, the next generation demands less, not more, office space per employee.

To add value to their properties, Westside Los Angeles office owners will need to design spaces that operate with greater efficiency.  They will also have to account for greater densities of employees in these spaces.  These two tasks need to be accomplished simultaneously while continuing to foster an interesting and creative atmosphere.  These environments will further promote collaboration and will have a positive effect on employees rather than sticking them in cubicle farms.

The Westside does not need more space, but simply better quality of space. Despite a 20% vacancy rate in Playa Vista, developers are planning to bring on another million square feet of office space in the next couple of years.  If the future workforce demands less space, one may question why this is being planned.  Investors, developers and owners have to ask themselves if they are meeting a tenant demand or investor demand.