CREJ

Page 10 — Office Properties Quarterly — September 2019 www.crej.com Market Trends S omeone wise once said the difference between a “space” and a “sense of place” is meaning. When we drive by a random house, we see a structure, but when we walk in our front door after a day’s work, we relax because we’ve come home. As the saying goes, we strive to make our house a home. Striving to imbue places in which we spend time with a sense of meaning is part of being human. This sense of meaning provides us with a sense of wellbeing. As landlords, focusing thought and capital on improve- ments catering to this cornerstone will ensure a lasting effect on value that transcends compelling archi- tecture, asset class or generational change in the workforce. The evolution of office space continues to remain an exciting focus in our industry. Despite ris- ing construction costs, landlords are nonetheless striving to deliver product that is visually stimulating, efficiently laid out, environmentally friendly and – less tangibly – “cool.” Compounding the challenge is the need to maintain awareness of how generational shifts in work- ing style (millennials, Generation Z and beyond) will impact occupancy. Keeping abreast of the design and technology curve to ensure com- petitiveness can be all-consuming – and expensive. But focusing effort on predict- ing the cutting edge can lead to being caught on the bleeding edge – where money is spent on improvements not commensurately valued, followed by a corresponding impact to financial returns. Given the pace of change, it’s easy to miss the mark when focus- ing on design and technology fea- tures tenants may want in five or 10 years – but with- out risking inno- vation, we risk asset irrelevancy, which can negatively impact value just the same. While it’s an exciting time to be in the office sector it’s also easy to get caught navigating this conundrum and lose sight of the most fundamental needs we, as people, value. Perhaps the best insurance against changing trends involves less money and more attention to what makes us human. What if the safest investment for landlords has little to do with better technology or more visually stimulating architec- ture? Arguably, the most robust invest- ment owners can make is to addresses the need to add lasting, generationally neutral value via relationships. There are a few things about humans that remain con- stant: We’re relational beings, we experience a need to feel we’re con- tributing to something larger than ourselves, and we desire our differ- ent work styles are both respected and reflected in the physical space in which we work. The timelessness of investment in these arenas is the ultimate mitigator of risk associated with tech, style and architecture trends. Addressing these human needs creates the “sense of place” that makes coming to work more fulfilling. Relationships feed our need to be known – and to know others. This matters to us on all levels of our lives. At work, we’d like rela- tionships with our landlord to go beyond utilitarian interactions with a property manager. We also value variety in our relationships that can be further addressed by creating a built space that facilitates forced collisions with professionals we may not otherwise meet. As Americans, we work hard – and office workers spend most of their waking hours during the week in a single building – or even a single cube – which can be isolating. A management team focused on cre- ating opportunities for tenants of varying backgrounds to interact will lead to a greater sense of meaning in the workplace through organic networking, expanding friendships and new business opportunities – all of which benefit a landlord’s bot- tom line through reduced attrition. It’s also essential to thought- fully consider the oft-overlooked fact that work styles vary greatly based on personality types. Some of us feel recharged by constant social interaction while others add tremendous value when they can retreat to a quiet space to work. Both introverts and extroverts bring nuance and sophistication to a company – but they have different strengths, values and work styles. Forcing introverted workers into open desking (without any option for a quiet workspace in which to retreat) will work as poorly as rob- bing extroverted employees from spontaneous interaction (sticking them in a secluded office all day). Interior design catering to both ends of this personality spectrum will result in less employee attri- tion, a greater sense of wellbeing and more fulfilled workers – regard- less of whether a building is a Class A or C asset. This creates value for tenants – and thus office assets. Office designed to facilitate rela- tionships and respect work styles will be more likely to thrive – finan- cially and otherwise – because it directly impacts our human need to feel we’re a part of something larger than ourselves. Doing our part as landlords to help foster a “sense of place” in our buildings will never be an outdated investment. While not as capital intensive, it is a more thought- intensive process – and equally applicable to new Class A office as it is to a suburban Class C building. Our preferences for architecture and technology will be ever chang- ing – but the fundamentals of what makes us human are here to stay – and the wisest sustainable invest- ment of all. ▲ Fostering a sense of place will never be outdated Jeffrey B. Dean Director of real estate, Industry