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Property Management’s Role in the Development of New Office Spaces

Posted By: Commercial Property Executive on March 15, 2023.  For more information, please click here to read the source article.

From amenity spaces to the carbon footprint, property managers play a central role in the design of commercial offices.

Traditionally, the design and development of commercial office spaces has been the task of architects, engineers and urban planners. While those professionals do much to influence office projects, they often have relatively little interaction with tenants and their employees. The day-to-day function of an office space, as well as its optimal uses, is the job of the property managers who oversee operations on both a micro and macro level.

In light of the evolving nature of office work, property management-related design considerations, at all stages of development, are central to a commercial office space’s success. According to experts, the key is a data-driven, nuanced analysis which takes into account tenant needs and how the space fits in to its surroundings.

A case-by-case approach

For many property managers involved in this process, a common theme is a recognition that optimality in management is specific to the uses and needs of a space’s tenants, as well as its integration with its surroundings. Chase Garbarino, co-founder & CEO of office and workplace management software provider HqO, sees value generation in these respects as a matter of site-specific strategy. According to Garbarino, such methods should be driven by data-focused analysis of engagement and productivity as well as tenant uses, something unique to individual office spaces and buildings.

“A corporate lawyer, in terms of the space they need for private conversation, is very different from an engineer in our company developing software,” Garbarino told Commercial Property Executive. “When you’re talking to a tech company, you should have an integral understanding of the trends of how engineers work. If it’s a call center, what are the different needs they have for physical space?”

As such, property managers not only play an instrumental role in design process through their operational expertise, but through their technological knowledge. Transwestern embodies this approach in its management-focused development of office space, which focuses equally on tenant experience and maximizing an operator’s returns.

According to Kelly Wheeler, senior vice president & director of operations and strategy for asset services, “The first thing that is most important to understand is what the developer or owners’ goals are, and that is going to vary by asset class and location. Something that you may do in a central business district, you may not do 30 miles west of Houston.”

As a result, specificity informs the business goals of a project. “Recommendations change based on location and asset class,” Wheeler noted. “When you are going ground-up versus repositioning, you have to consider existing occupancy and the tenants already in place.”

The firm implemented these principles during construction of Bank of America Tower in Houston, which was completed in 2019. The property management team was brought on a year before the building was occupied, which enabled it to evaluate everything from mechanical systems to lobby green spaces. “Being able to contribute those nuances during the development of a building are really valuable in the long run,” Wheeler said.

Constant evaluation

To evaluate the needs of tenants and workers at both the macro and micro levels, Garbarino emphasizes using engagement data, as well as building customer-focused relationships. What managers and their colleagues should not do in these aspects is simply borrow from other operators. “The problem historically, in the industry, has been an amenity arms race,” he cautioned. “Don’t go in LinkedIn and see that one hot new amenity that everyone is posting about; that is the polar opposite of being customer-oriented.”

This is a continued focus for Transwestern, particularly regarding the tenant experience in a new development. “Thinking about what the tenants’ experience is going to be after the building is occupied really comes from people who have experience operating the building,” Wheeler noted. “Do you design an open coworking space so that they have a third place to work? Do you have an outdoor garden?”

Building relationships

Alongside the relationships that tenants will have with the space and each other, property managers should consider how an office building is integrated into its location. Those considerations range from the property’s carbon footprint to its potential uses as a public space.  For Hudson Pacific Properties, this mindset governs both the company’s approach to sustainability and its interactions with surroundings. From a sustainability perspective, Chuck We, executive vice president of the firm’s northwestern and Canada investments, takes a two-pronged approach, which he sums up as “operational sustainability” and “sustainability from embodied carbon.”

We detailed the firm’s emphasis on moving from coal and gas power toward electrification at the buildings it owns and manages. This approach extends to embodied carbon, where Hudson Pacific has streamlined the sourcing of its materials and products to providers that are able to source locally. “[In the] built space, if you can have an impact on embodied carbon by rebuilding and creating, you can have just as much of an impact on the environment.” We told CPE.

Where the more intangible relationships are concerned, Hudson Pacific has taken to treating spaces as communities that should be integrated with their surroundings. Areas that would conventionally be used for employee dining are transformed to become more accessible.

“Historically, you would look at how many seats can we put out there for people to come out from their office space and have lunch,” he said. “Now, we actually look at that as a bit more of a public amenity. You can drive a couple of food trucks up to service that lunch. It’s not just about building the hard-edge facility; it’s thinking about how you integrate it into the overall thinking about your campus and your offering.”