The Shape of Space to Come

Hoteling, Moteling, and Telecommuting Are Popular Options for the '90s.

Alternative office arrangements such as telecommuting and open space plans are one result of the technological changes that are reshaping real estate employment patterns. These options are changing not only the way the workplace looks, but the way it functions, according to Stephen Ross, research director for Grubb & Ellis Commercial Real Estate Services in the Pacific Northwest region.

A 1994 survey by Grubb & Ellis, Ernst & Young, and National Real Estate Investor shows a strong trend toward telecommuting among its respondents, members of the National Association of Corporate Real Estate Executives (NACORE).

Telecommuting allows mobile professionals to set up a virtual office virtually anywhere: in the car, on a plane, in a hotel room, at home, or even at the beach while on vacation. With a laptop computer, portable printer, and cellular phone, telecommuters can produce documents, tap data banks, use e-mail and voice mail, and return messages. Companies like Grubb & Ellis are installing Wide Area Networks that allow real estate agents to dial in from satellite offices, homes, and cars to conduct business as if they were in the office, Ross says. (For profiles of highly mobile CCIMs, see CIREJ, Technology Issue, December 1994, page 37.)

The technology that made such mobility possible coincided with the recession of the late 1980s and early 1990s, as well as the Clean Air Act of 1990, which required companies with more than 100 employees to reduce the number of miles driven by their work force. Striving to comply with the legislation, companies identified certain employees who could work from home or satellite locations. Seeking to cut costs, corporations considered the possibility that employees on the road did not really need full-time offices. The results inspired two alternative office concepts: hoteling and home or satellite officing.

Hoteling, a concept sometimes credited to Ernst & Young, reduces space demands by enabling workers to share offices or cubicles. Employees book reservations, as at a hotel. When they arrive, their personal files and office accoutrements are waiting for them. (A less formal variation, called moteling, allows workers to check in unannounced and use whatever space is available.)

The concept has made the most headway in small firms, where, on average, 44 percent of employees reported hoteling, compared with 10 percent of those in larger companies. This response surprised the researchers, who expected to find greater use of hoteling among corporate giants with high concentrations of frequent travelers such as sales representatives and consultants.

The difference may reflect not corporate resistance but a lack of motivation, suggests Rick Friedman, real estate director for Tribune Properties, Incorporated, in Chicago. "The companies that have been forced by business conditions to rethink their processes have rethought their work environment," he says. "The status quo has a lot of inertia built in."

Union Carbide has adopted elements of hoteling while trying to avoid the hype associated with the trend, says Steve Moore, CCIM, manager of real estate for Union Carbide Corporation, who is based in Southbury, Connecticut. Among departments where telecommuting is viable, two or three people may share a cubicle, and the company is reducing the number of private offices in favor of open space plans.

But Moore draws the line at letting space-reduction goals drive the planning process. "Some say we should go to five, six, eight people to a cubicle," or make the cubicles smaller, he says. "We try to figure out how much space people need to do their job. Maybe eight feet is not enough. They may need 10 feet." And if they need it, he reasons, giving them less would amount to foolish frugality.

Home Work
According to the 1994 survey, telecommuting from home has found acceptance at only 24 percent of the firms polled-in general, the same firms that embrace hoteling. Again, the small firms showed a greater tendency to encourage working from home. Ironically, the Clean Air Act that supposedly drove the trend applies only to large companies.

Even more than hoteling, home officing requires discipline and independence, Moore says. Homes have many distractions and often not enough space to work efficiently. Moreover, creating an ergonomically correct, technologically advanced work setting for each home-based employee requires considerable investment that offsets the savings realized from reducing corporate office space.

Wide Open Spaces
Telecommuting has changed not only where the jobs are, but what the office looks like. The contemporary floor plan calls for more open space and fewer private offices than in past designs, according to Kurt Zeiser, president of Griswold, Heckel & Kelly Associates, Incorporated (GHK), an architectural firm that has designed numerous offices for clients using the hoteling concept.

The contemporary corporate office plan features:

  • A multifunction room, adaptable to many uses at once;
  • A red-carpet club, much like an airport's executive lounge, with phones, computers, reservations assistance, and support staff;
  • The hearth, an informal space with a coffee maker, bulletin board, fax, copier, library, and office supplies;
  • A huddle room, a small, enclosed room for informal conversations behind closed doors;
  • Sector study rooms, gathering places with lounge chairs, where workers can come to chat or spend their down time;
  • Quick stops, wide spots in the corridors where co-workers can stop for brief conversations;
  • Quiet rooms for head-down tasks;
  • Team project areas, large rooms where employees can collaborate on projects over a period of hours or months; and
  • A proposal-development room, a more permanent version of the traditional "war room."

"Open planning is easy to change in technology and in organization. The configuration can literally support change overnight at low-cost, compared to the egg-crate environment," Zeiser says. Moveable partitions and sliding walls create private areas for a long or short term. And, like the less hierarchical organizational structure it reflects, the plan allows democratic participation and communication. Even the "perks" of windows can be shared by all rather than shut away in private offices. As an added benefit, open space is easier to air condition, further reducing office costs.

The Bottom Line
Industry experts believe that hoteling can reduce space requirements from 250 to 125 square feet per employee, according to the survey. Overall, survey participants indicated that hoteling has reduced their fixed office costs by 15 percent.

AT&T, for example, opened a telecommuting office center in New York two years ago. The 26,500-square-foot facility replaced a space three times that size. Altogether, 115 employees work there full-time and the rest of the staff telecommutes, according to the NACORE survey results.

In 1993 GHK designed the 100,000-square-foot corporate headquarters of Ernst & Young in Boston. The client's design directives included a space-utilization rate of 180 rentable square feet per person. To achieve that goal, GHK kept private offices to a minimum size and defined other staff spaces with a panel-hung furniture system that can be customized for specific job functions and altered for staff expansion. In departments designated for hoteling, shared workstations allowed one employee on location for every four in the field.

Firms that have adopted telecommuting have seen employee productivity rise 15 to 20 percent and realized real estate savings of 25 to 40 percent, according to Michael Bell, director of corporate real estate for Dun & Bradstreet.

The changes taking place in space planning also will affect office occupancy and the way buildings are developed. "There was a rush to high-rise construction a few years ago. Now the build-to-suit side wants low-rise, which offers more flexibility to move people around. What good is a 15,000-square-foot floor plate?" asks Jay Lucas, CCIM, president of the Commercial Investment Real Estate Institute and the office and investments division of the Harry B. Lucas Company in Dallas. "You will see a lot of functionally obsolete buildings. We'll need to tear down a lot of space."

But what will replace it? New construction-or extra phone lines?

Patricia K. Lemmons

Patricia K. Lemmons is a real estate and public relations writer based in Chicago. Letty Bierschenk, CCIM, above left, began her career in commercial real estate 23 years ago at the Los Angeles office of Coldwell Banker Commercial. There, she rose to become the only woman vice president in commercial brokerage and manager of the Investment Marketing Services Division. After 16 years with the company, she joined Grubb & Ellis as an investment specialist, and was named a vice president in November 1991. In December 1993, she left the firm to direct the Consultation Services Division of The Bierschenk Group, owned by her two sons. She served as president of the Greater Southern California CCIM Chapter in 1991. Additionally, she belongs to the National Association of REALTORS® and is a charter member of Women in Commercial Real Estate. She holds a bachelor\'s degree from the University of California at Los Angeles and a master\'s degree in federal taxation from Northrop University School of Law. B.K. Allen, CCIM, GRI, above center, first vice president and 1996 president elect of the Commercial Investment Real Estate Institute, serves as general partner of B.K. Allen Real Estate Ltd. of Vienna, Virginia. She oversees eight partnerships involving land development and construction of commercial and industrial warehousing, office buildings, and retail. Previously, she acted as sales manager for Ryan Lorey & Associates Inc., and as director of commercial development for Wills Investments Inc., both in Virginia. She entered the commercial real estate field in 1977 as owner and manager of Allen/Fredlock Properties in West Virginia. She is past president of the Virginia and West Virginia CCIM chapters. Her professional memberships include the Mid-Atlantic Real Estate Marketing Association as well as the local, state, and national REALTORS® associations. Allen graduated from Kentucky Wesleyan College and continued her studies at West Virginia University. Cynthia Shelton, CCIM, GRI, above right, heads Tampa, Florida-based CS Realty, acting as a consultant to Kinder Care in the development of work-place child-care centers in a 12-state region. Shelton has served as president of the Tampa Board of REALTORS®, chairwoman of admissions for the Florida Association of REALTORS®, a director of the National Association of REALTORS® and its chairwoman of research, vice president of the Florida CCIM chapter, and, most recently, a member of CIREI\'s Governing Council. Patricia Pollitt, CCIM, far left, with 15 years in the real estate profession, is president of Realty Investments Corp. in Red Deer, Alberta, Canada. Since its founding in 1983, the full-service commercial investment real estate company has specialized in property marketing, management, and acquisition. In 1993 the firm expanded to include mortgage brokerage. A member of CIREI\'s Designation Promotion Committee, Pollitt also has served for eight years as a director of the Red Deer and District Real Estate Board, and as the board\'s president in 1991. Additionally, she chaired CI Canada for the 85,000-member Canadian Real Estate Association in 1992. Barbara Monahan, CCIM, CRB, GRI, middle left, joined McCulley Management and Realty, Essex, Connecticut, in 1983 as a residential manager, rose to vice president, and was named partner and executive vice president in 1990. Monahan teaches real estate licensing and law at Middlesex Community College. On the national level, her professional activities include chairing CIREI\'s Education Promotion Committee and serving on its Education Steering and Designation committees. She also serves as president of the Connecticut CCIM chapter. Her educational background also includes studies at the University of Maryland in Munich, Germany, and the Universaire de Sorbonne in Paris.Deborah S. Skeans, CCIM, CRS, MAI, middle right, member of a real estate family, entered the field in 1971 and now serves as vice president of Imperial Real Estate, Allentown, Pennsylvania. Her experience spans brokerage, appraisal, and court testimony on issues including tax assessment appeals. Skeans studied real estate at Penn State University. She has served on CIREI\'s Governing Council and Executive Committee, and currently serves on the Long-Range Planning and Education Steering committees, among others. Joyce Slone Broholm, CCIM, SIOR, far right, an industrial leasing and development specialist, joined Paine/Wetzel Associates, Chicago, as a senior associate more than two years ago, after making her mark as one of the top brokers with Arthur J. Rogers Co., also located in Chicago. Previously, she headed Cimar Corp., responsible for a management and leasing portfolio of more than 500,000 square feet. Joyce is a member of the Association of Industrial Real Estate Brokers. Marianne Christian-Griffith, CCIM, left, owns and operates a Kirkland, Washington-based real estate consulting firm that bears her name. As a retail site consultant, she works with Red Robin International, McDonald\'s Corp., BP Oil, Wendy\'s International Inc., Bridgestone-Firestone, and other national chains. Christian-Griffith is a past councilor of the Commercial Investment Real Estate Institute. She holds brokerage licenses in Oregon, Washington, and Alaska, and for the past five years has served on the board of the Commercial Investment Brokers Association. Additionally, she is a member of NACORE and ICSC. She earned a bachelor\'s degree from the University of California at Berkeley and a master\'s degree from Boise State University in Idaho. Linda Peroff, CCIM, right, began her career in investment property sales in 1978. She joined Cohen-Esrey Real Estate Services Inc., Kansas City, Missouri, in 1982 and managed its Investment Properties Department from 1987 to 1990, when she accepted a position as regional REO coordinator with the Resolution Trust Corp. In 1993, she returned to Cohen-Esrey, where she continues to specialize in multifamily property sales. Peroff has received numerous sales awards, including a Distinguished Sales Award from the Sales and Marketing Executives of Kansas City and the 1985 Commercial REALTOR® of the Year award from the Metropolitan Kansas City Board of REALTORS®, the first time on record a women was so honored. She holds a bachelor\'s degree from the University of Missouri at Kansas City and a master of science from the University of New Mexico. Patricia Lynn, CCIM, not pictured, with 18 years\' experience in commercial real estate, currently serves as vice president and regional marketing director for Grubb & Ellis Asset Services in San Francisco. Previously, she spent three years in real estate banking with Cushman & Wakefield\'s Financial Services Group. Earlier, she served as a broker of investment properties for Rubloff Inc. She began her career in office leasing and sales for Pearson Realty in Fresno, California. Lynn serves as a senior instructor for the Commercial Investment Real Estate Institute faculty. In addition, she has lectured before the Bank of America, BOMA, NAIOP, and California Polytechnic State University\'s School of Business Administration, her alma mater. Lynn received a degree in business administration with an emphasis on finance and real estate.