Office

The New Bottom Lines

Corporations recalibrate their real estate strategies.

Cost is still the main driver when most corporations consider the future of their office space portfolios, and for good reason. But according to Johnson Controls’ recent Collaboration 2020 study, this narrow perspective signals lost opportunities in the areas of knowledge worker productivity and innovation.

“To create the most efficient workplace possible is a decision that goes beyond economics,” says Andrew Harnish, CCIM, director of enterprise development for Johnson Controls in Seattle. “A smaller, more-efficient, and more-comfortable footprint supports the triple bottom line of people, planet, and profit.”

How can brokers and portfolio managers integrate this triple bottom line into strategic planning for evolving office space? First, consider the people who power your organization: staff and customers. Before building or renovating, conduct a change management survey, says Ryan M. Lorey, CCIM, director of global real estate at Booz Allen Hamilton in McLean, Va.

“Don’t assume new is better,” he explains. “Companies need to assess how they deliver work to their clients and how the workforce likes to create and deliver the product.” For example, a corporation’s office space might have client proximity requirements. “In consulting, there’s a strong argument for a hoteling model, since the staff should be out there with the customers,” Lorey adds.

Also, changes in work habits can be stressful to a workforce, so hoteling, hot-desking, and other programs need to be carried out carefully, Harnish says.

Sustainability is also becoming a concern for corporations –- especially because it often serves the people and profit bottom lines too. For example, AT&T considers any sustainability driven project that has a cost-reduction payback of less than three years. “Lighting is the obvious one, but variable-frequency drives on large air handlers can have a good return as well,” says Dennis Virzi, CCIM, a senior portfolio manager with AT&T in Dallas.

And when Lorey and his team were planning the development of new, more-efficient office buildings, they worked with mapping programs indicating where each staff member lived. The company determined the locations of the new buildings based on the highest concentrations of employees. “This has been a highly successful effort to reduce staff commute, automobile traffic, and carbon emissions,” Lorey says.

Such knowledge can’t be gained in a silo. Preparing for tomorrow’s office requires collaboration among brokers, portfolio managers, company leaders, and employees. If project managers learn how a corporation’s real estate goals can serve its business goals, they can capture that lowest of bottom lines.

Rich Rosfelder is associate editor of Commercial Investment Real Estate.

Rich Rosfelder

Rich Rosfelder is vice president of strategic communications for CCIM Institute.

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