From the Growth of Tech to Economic Uncertainty, Four Takeaways from ULI’s Spring Meeting

Look to Seattle and the Pacific Northwest for a Preview of the Changes Coming to Real Estate

May 18, 2017

Partner, NBBJ

Thousands of leaders in real estate converged on Seattle earlier this month for the annual Urban Land Institute (ULI) spring meeting. Clouds parted in the notoriously drizzly Pacific Northwest town to show off its finest hour as a city engaged in building one of the most “user-friendly” cities in the United States.

As the largest urban area in the Pacific Northwest and a tech cousin to San Francisco, this 700,000-person city — with a regional population of approximately 3.8 million people — enjoys tremendous growth in the technology sector, with companies like Amazon consuming massive amounts of real estate. To counter the growing pains of San Francisco, Seattle is trying to develop its urban core to take advantage of the city infrastructure and to diversify its community. Here are four key takeaways from the conversation about these issues at ULI, and a few provocations for the future.

1) Neighborhood as Catalyst
With a strong interest in the South Lake Union neighborhood, many events and tours at the ULI event showed the tremendous impact of revitalizing this once parking-lot-filled area of Seattle into a vibrant mixed-use neighborhood. Home to a variety of organizations, South Lake Union integrates working, living and playing in a medium-density format. The area is rich with architectural character — blending the past and present with the energy of youth and optimism fueled by the millennial ethos. While not perfect, South Lake Union presents a great case study on how public and private partnerships can come together to spur development — from parks and retail, to corporate headquarters and new forms of transportation.

2) A Strong, but Uncertain, Economy
Another topic of interest was defining where we are in the economic cycle. Entering the seventh year of sustained growth after the “great recession,” there are varied opinions on the topic. Terms like “extra innings” and “double-header” were used as a familiar analogy to describe the sentiment. Are we close to a walk-off home run with two outs and a 3-2 count? Or are we in the 3rd inning of the evening game of the double-header?

One statement made by Tom Hennessy from Equity International caught my attention and I think is a more accurate assessment. Tom described the current situation as “land priced to perfection.” Unpacking his statement, Tom says the costs to continue this cycle of economic vitality are at a premium with zero margin for error. This will likely tighten the market significantly. However, the United States is and should continue to be a safe haven for international capital, which is beginning to flow into cities where vacancy rates are declining.

3) The Trump Effect
What conversation doesn’t include some discussion about politics? The market enthusiasm for bank deregulation, corporate tax cuts and support for small and medium business has everyone optimistic. However, many also expressed concern about the lack of traction and inability to move policy forward in Washington. This gridlock will likely not bode well for the markets, which could overshadow aforementioned positivity.

4) A Time for Tech
Seattle, with its tremendous development boom and 60+ construction cranes, had many people asking, “How much gas is still in the tank?” On one hand, it seems all economies are cyclical, even Seattle’s. But on the other hand, the growth of the tech industry seems to create anomalies that aren’t just based on traditional metrics. During the ULI meeting, Amazon’s vice president of global real estate, John Schoettler, announced that the company will hire 100,000 employees over the next 18 months. While that number represents employees around the world, it still equates to over 5,000 people per month — the size of a small Eastern Washington town. These figures underscore the dramatic shift that is happening in this “second machine age” fueled by extraordinary advances in computing technology. Developers and cities would be wise to continue to invest in this industry for years to come.

Regardless of these trends and what else is to come, it’s safe to say that we are just at the tip of the iceberg of the unimaginable changes that will take place in society. Over the next 10 years, disruptions such as driverless cars, more mobile ways of living and working, artificial intelligence and extraordinary breakthroughs in bio-science will transform cities and human life in profound ways. My friends and colleagues at ULI are perfectly positioned to lead and drive this discussion. Economy, ROI and politics aside — the future is bright and will be looking for innovation at all levels. It’s going to be quite a journey, so buckle up and enjoy the ride!

Image courtesy of Kevin Scott/NBBJ.

Share this:  envelope facebook twitter googleplus tumblr linkedin
Comment Follow nbbX

The Four Types of Strategic Real Estate Amenities

From Swimming Pools to Pirate Ships, Amenities (Even Crazy Ones) Aren’t Just Perks, but Assets to Enhance Performance

May 9, 2017

Researcher, NBBJ

As competition for tenants, patients, employees and students has intensified, amenities have become an important asset and differentiator across all building types. For example, the total amount of space devoted to amenities in commercial office buildings has risen from 3 percent to 12 percent for high-end tenants, while hospitals and higher education institutions have spent billions to create amenity-rich campuses. Amenities not only draw potential building users, but they also can have a positive impact in terms of asking rates, employee retention [PDF], patient satisfaction and patient outcomes.

While food service has become a baseline amenity in a wide range of facilities, four other amenity types are gaining popularity, namely, those which support fitness & health, access to nature, flexibility & control, and positive distraction.

NBBX_Amenities_Graphic_3_2048

 

Fitness & Health

Gyms are high on the list of employees’ desired amenities, particularly among millennials. In fact, three quarters of European employers already provide fitness facilities, expecting to benefit through reduced healthcare costs and improved productivity. Companies like Chesapeake Energy provide not just gyms but basketball courts and Olympic-sized swimming pools, while even coworking spaces like Brooklyn Boulders Somerville feature major fitness amenities like 22-foot climbing walls.

In healthcare, wellness and fitness centers have evolved from marketing gimmicks into profitable and popular amenities supporting integrated care and population health models. Akron General’s Health & Wellness Center–Green, for example, incorporates a fitness center with outpatient services and emergency department in a sprawling complex, while Florida Hospital is building an 80,000-square-foot wellness center that features indoor farmers’ markets.

 

Access to Nature

Green space is one of the most desired yet underprovided amenities in office buildings, according to surveys of millennials, and has a restorative effect on the weary. Some of the more innovative examples of green space amenities include multi-story glass spheres at Amazon’s new headquarters in Seattle, and a 43,000-square-foot urban farm at Pasona Group’s main offices in Tokyo.

Evidence-based design studies have also demonstrated that patients with a view of nature have less anxiety and pain [PDF], which has helped popularize healing gardens and other green amenities in the healthcare industry. For example, Diakonie-Klinikum Stuttgart has over 150,000 square feet of green space and gardens, while Massachusetts General Hospital’s Lunder Building has an atrium featuring hanging gardens.

 

Flexibility & Control

Employees that have a higher degree of control over where they work, including access to private space and a range of task-appropriate work environments, tend to have a higher degree of workplace engagement. Companies like ViaStat and Thermo Fisher Scientific have actively encouraged employees to modify and redesign their work environments to provide more flexibility and personal control.

Other studies have found that giving patients more personal control and choice reduces stress, an insight hospitals accommodate by creating relaxation rooms and enabling patients to control variables like lighting, sound and temperature. UCSD Jacobs Medical Center’s new facility gives patients iPads which control windows shades, room lights, the thermostat and an Apple TV.

 

Positive Distraction

Game and recreation areas have long been common in the tech industry but are becoming a more widespread phenomenon. These spaces may seem juvenile, but research suggests that helping people feel younger improves productivity. Other workplace amenities like lounges, libraries and terraces can help to create more varied, stimulating environments. Some more unusual examples include a mock pirate ship at Inventionland’s headquarters, and a 65-foot Ferris wheel at Acuity’s main offices.

Hospitals have invested in common spaces like lobbies and lounges to create areas of positive distraction and to reduce stress. At the Minnesota Health Clinics and Surgery Center, waiting spaces have discovery bars where patients can explore research and educational materials via iPads, while Lurie Children’s Hospital has a custom fire truck that kids can play in.

 

Research and anecdotal evidence suggest that amenities which support fitness & health, access to nature, flexibility & control and positive distraction can have tangible benefits. The right type of amenity can be not just a perk but an asset that contributes to the bottom line, whether it’s more engaged employees, better patient outcomes or more desirable properties.

Banner image courtesy of Pixabay.

Infographic © NBBJ.

Share this:  envelope facebook twitter googleplus tumblr linkedin
Comment Follow nbbX

How Tech Companies are Rethinking the High-Rise Workplace

Eight New Ideas for the High-Rise of the Future

April 24, 2017

Design Partner, NBBJ

Editor’s Note: This post, adapted from a talk delivered at the Council on Tall Buildings and Urban Habitat (CTBUH) 2016 China Conference on October 18, 2016, in Shenzhen, was originally published by NAIOP.

Seventy percent of the world’s population will live in cities by 2050. This is a dramatic change over one and a half generations, and it will require us to rethink how we build our cities.

At the same time, many tech companies — Amazon, Tencent, Google, Samsung and others — are infusing digital technology into how cities are built and operated. They’re introducing different thinking about what defines a high-rise and a city.

The traditional high-rise building paradigm is simplistic: stacked floor plates, disconnected from each other, with little integration of technology and disconnected from the life of the city, except as an urban icon or a passive lens from which to look out. Most tech companies, however, as well as companies in other industries, are looking for a more social workplace, more interaction between employees and a work experience that reflects their brand. Cities are also changing, as they toss off the “inner city” stigmas of the previous generation and become places to live, work and play. As a result, the high-rise building paradigm needs to change into something more porous and highly networked.

Here are just a few possibilities:

  1. The high-rise building typology is highly ossified, but if we can deconstruct it, we can create seams in which people actually talk to each other, interact and generate new ideas. One way to accomplish this objective is by moving the core from the center of the building to the edge and creating common space at the center. The more we promote visual and physical communication in buildings, the more we can move towards community, innovation and happier places to work.
  2. The vertical, linear nature of elevators also reinforces the disconnection of people and the ossification of the high-rise. If we can look at movement systems from a more multivalent or “grid” perspective — with “skip-stop” elevators that force people to interact on higher floors, with more stairs and escalators between floors, and with multistory atriums for visual connections — we can open up a lot of possibilities.
  3. If the high-rise building is a city-planning problem, maybe public spaces, legislated vertically, can change the way we interact with buildings. Through planning and zoning we can create vertical urbanization purposefully. Just as traditional planning and zoning regulations for setbacks and heights are purposeful, we can open new possibilities for purposeful public space, green spaces and street volumes.
  4. Green facades are a simplistic way of incorporating nature into a high-rise. The more interesting possibility is to think of the building as a true ecosystem — which, again, is human- or life-based. If we can include plants and fresh air in the workplace and make our buildings more organic, it will change the way we interact and perform in buildings. Perhaps we could even grow food for a building’s inhabitants within the frame of the building itself.
  5. A lot of companies are broken into teams. If we think about those teams as “neighborhoods,” we can create connective tissue — almost like a plaza, a park or a square in a small city — between them to bring people together in a type of “village-ification” of the high-rise.
  6. Another priority: daylight for all. If towers are covering the city in shadows, what can we do about it? If we start thinking about geometry, technology and materials to bring daylight down to the street, we can start using buildings to solve problems that everyone experiences — even those who never set foot inside a building we design.
  7. At the same time, super-light towers are becoming possible. What can we learn about new materials — carbon fiber, for instance — from companies like Boeing? Studies suggest we can reduce steel and concrete in supertall towers by 35 to 40 percent. In an era of sustainability and scarce resources, those are things we should be thinking about.
  8. Finally, can the high-rise building become a technology platform? The internet giant Tencent, the most valuable company in Asia according to Fortune, is using its new headquarters tower as a lab for their own product portfolio, integrating elevators, lighting, conferencing, parking and security with their own WeChat-based products. By testing their products on themselves, they are not only making their workplace more efficient, but also learning how to create better products for their customers.

The basic, underlying principle for tall buildings and workplaces in the future will be to connect people and make life in our cities more sustainable. How can we, in ways we never could have imagined in the past, create a better, more human experience in the city and in the high-rise building? Therein lies the challenge. Solving it will spur us to greater innovation, synergy and new ways of thinking.

Banner image of Tencent headquarters © Terrence Zhang, courtesy NBBJ.

Share this:  envelope facebook twitter googleplus tumblr linkedin
Comment Follow nbbX
Next Page »