Impact of technology on the workforce and commercial real estate
With your cell phone having more computing power than all of NASA back in 1969 when it sent two astronauts to the moon, technology has emerged as a significant wonder of the 21st Century.
Technology is integrated within our lives in both apparent and transparent ways. It’s made actions and processes easier while connecting us to people anywhere and at any time. Therefore, it should come as no surprise that technology has also changed how and where we work in ways that were unimaginable just a few years ago.
Among the goals of technology is to make actions and processes easier to complete, while also fostering communication and collaboration. As a result, new technologies have been integrated into the workplace. It flows through all business sectors and has freed employees from being attached to their desks every day. Technology has given birth to the mobile workforce that can work from home or the local coffee shop.
Here are some emerging trends impacting workspace and commercial real estate in the Meadowlands.
Shifting demographics
Against the backdrop of technological advancements, one of the largest demographics shifts ever witnessed in the U.S. has been gaining momentum. By 2030, the Millennial generation is expected to make up three-quarters of the U.S. workforce. Meanwhile, Generation Z, the largest generation ever, is also beginning to enter the workforce.
So why is this wave of new generations in the workforce significant, you may ask? Millennials and Generation Z have been raised on technology. These are generations that have grown up in the digital world and is making its presence felt in the workplace. They are accustomed to on-demand technology and collaborative workspaces.
Furthermore, the quality of technology in the workplace will influence where they work.
With the national and New Jersey unemployment rates at historically low levels, employers are challenged to fill open positions with qualified candidates. With competition for talent intense, companies spanning a variety of sectors are looking for ways to tap this generation for their workforce. Employers are looking to differentiate based on location, amenities and environment.
This includes creating a technology driven workspace that meets the needs and expectations of Millennials and Generation Z.
“Today’s workspaces need to engage a workforce that is demanding a different environment than traditional office spaces. A collaborative workspace needs to support different ways of working and offer a variety of spaces to support both working alone and in collaboration with others. Our clients are creating environments that are destinations their people want to work in and that help them be more productive. From quiet rooms to technology rich huddle spaces, we’re helping to create environments that are dynamic and inspiring spaces.”
Kevin Klier | Senior EVP and General Manager | dancker | dancker.com
“These new work environments can also be used to attract new employees who see the benefit of working in collaborative spaces over the conventional work environments. Younger employees are already learning and living in these types of settings, so this approach is consistent and familiar with how they interact.”
Anthony Guzzo | President | Guzzo + Guzzo | gg-architect.com
Collaboration is key
Advancements in smart phones, tablets, social networking sites and chat apps have brought communication to a new level. Mobile and cloud technologies now allow instant and remote access to the workplace from anywhere in the world. Technology nurtures collaboration, offering the ability to connect to colleagues anywhere and at any time.
Collaboration has become the cultural goal of many companies today for good reason: a collaborative work environment leads to more productivity, creativity and innovation.
“We are currently working with several clients that are realizing the need to break down the barriers of the traditional office space. They want to remove the old high walled cubicles and the closed off offices and replace them with new open collaborative workspaces with lots of natural light. Companies are finding that traditional work environment is not conducive to the way people actually work. These new workspace breaks down the barriers between the traditional office hierarchy and helps to promote a more team-oriented approach which can also increase productivity.”
Anthony Guzzo | President | Guzzo + Guzzo | gg-architect.com
Furniture is keeping pace
With the arrival of the collaborative workplace trend, it is not surprising that we are seeing an uptick in collaborative furniture items to choose from.
“The furniture world has grown to great lengths to provide employees with a dynamic office environment catered to their needs. Modular privacy booths keep conversations private when necessary while working in an open office setting. Sit to stand desks give you the flexibility to stretch your legs and move around while still staying focused on your work. Some offices don’t have the real estate for standard seating so adding a little color and a soft, comfortable stool-like seat can make any area in the office a collaborative one.”
Anthony Battaglia | Business Development | KAD Associates | kad-associates.com
“There are some great new products emerging that really embrace the collaborative and team approach. The furniture industry has really responded with a variety of creative options such as prefabricated office pods, writable glass wall surfaces, group seating pods with privacy backs and canopies, multi-functional seating with power outlets and fold away work tops and small phone booth rooms for cell phone privacy.”
Anthony Guzzo | President | Guzzo + Guzzo | gg-architect.com
Building brand awareness and experience
Ideally an office space reflects an organization’s branding and delivers a cohesive message to everyone who walks into the space, whether they are employees, partners or clients. Through the use of design elements, signage, finishes and artwork, organizations can set an ideal visual experience that raises brand awareness and gives meaning to the space.
“Generally speaking, in response to today’s team oriented/flexible office design and shared workspaces, architectural signage needs to be inherently flexible and changeable. To that end we are also seeing more digital/interactive signage used in applications where static signage has traditionally been used.”
Danijel K. Farkas | Partner | Designer Sign Systems, LLC | dss-nj.com
Impact on commercial real estate
This brings us to the commercial real estate arena, where office buildings and the workspaces within them are being influenced by new technology and working habits. The office property sector is undergoing a significant transformation, driven by corporate demands for new and varying types of amenities.
Food trucks, roof decks, on-site IT genius bars, game rooms and subsidized ride sharing programs to and from buildings are just some of the amenities being rolled out by building owners. Smart-building technologies including HVAC systems and lighting systems are learning their tenants’ patterns and preferences to maintain comfortable working environments.
Meanwhile, the outdated office buildings unable to attract today’s tenants will be demolished or converted to alternative uses. More than 1.7 million square feet of buildings were removed from the New Jersey office market during the first half of 2018, with this trend expected to continue in the coming years. The removal of these outdated buildings will also help to exert downward pressures on the state’s overall vacancy rate, which had stubbornly persisted near the 25% level for the past few years.
“Long gone are the grandiose lobbies and outdated gyms crammed into un-leasable basement spaces. With employee health and wellness emerging as a major focus for today’s companies, landlords are touting high-end fitness centers and other wellness amenities to attract tenants and their employees. The push for high-end office spaces has encouraged landlords to upgrade their buildings and pack them with the amenities to stand above the competition.”
Frank Recine | Executive Managing Director | Jones Lang LaSalle Brokerage, Inc. (JLL) | us.jll.com
“We are noticing a growing trend in the area where landlords are pursuing major renovations to facilities when clients are willing to enter into longer term leases. Some clients, particularly those in the healthcare industry, are looking for substantial landlord improvement packages and in turn are prepared to enter into long term commitments. This trend will undoubtedly improve the inventory of office space in the Meadowlands and lend to further stability of the region’s office market.”
Jamie Weiss | President | Weiss Realty | jweissrealty.com
Loaded & equipped office spaces
Office workspaces have also evolved in response to new technologies and the needs of a workforce fueled by Millennials and Generation Z. The growth of cloud computing and digitization of paperwork formerly housed in filing cabinets/storage rooms have reduced the office space footprints of many tenants.
One only needs to look at the legal services sector, where vast law libraries are now housed in digital filing systems. Collaborative workspaces and open environments have replaced rows of cubicles and large C-suite offices. The open office concept is also being made possible by the elimination of assigned desks, as more employees work remotely.
“The challenge for office tenants is finding the right balance between privacy and open layouts. All open workspaces have the potential to be distracting and even inhibit the productivity they are supposed to be fostering. Increasingly, today’s office floorplan is likely to include a hybrid layout that includes space for hoteling, amenities, break-out/huddle rooms for collaboration and “focus booths” for concentration.”
Frank Recine | Executive Managing Director | Jones Lang LaSalle Brokerage, Inc. (JLL) | us.jll.com
Looking ahead
In closing, technology has clearly influenced how we work, communicate and interact with one another around the world. Its impact is felt in the workplaces of startup firms and established international companies alike. The adoptin of technology by Millennials and Generation Z will only foster its proliferation.
Furthermore, since technology is constantly evolving with no “end-point”, it will continue to reshape our daily lives at an ever rapidly growing pace.
Frank Recine is an Executive Managing Director at Jones Lang LaSalle Brokerage, Inc. (JLL) and can be reached at (973) 829-4738 or frank.recine@am.jll.com. More information about JLL can be found at www.us.jll.com. Recine also serves on the Board of Advisors of the Meadowlands Chamber, offering real estate expertise to the board’s Financial Futures Initiative. The initiative addresses critical issues in retirement & estate planning, insurance, benefits, business secession planning, workforce development, aging workforce/population, second careers and volunteerism.
