Empty floor space whether in new or older commercial office buildings is not producing rental revenue. And with rising construction costs, many building owners and managers are reluctant to invest in fully built-out spaces using conventional drywall construction “on spec” as a means of attracting new tenants.
Changes in the office rental marketplace have necessitated a rethinking on the part of building owners and managers to meet the expectations of a new breed of tenant. Today’s prospective tenants seek high tech, high class and beautifully designed offices that are crucial to attracting the highly qualified personnel needed for their businesses to succeed. They want it “now” and at the same time they want the freedom to customize on short order floor plans to tailor spaces to meet specific requirements. For more on this see our post The Workplace as a Recruiting Tool.
The Changing Workplace
Change is endemic to today’s office layouts. A recent article in Gensler On Work focused on what is called placemaking. The author suggests answering the question “what about this space compels people to want to occupy it in the first place?” He noted that people will show up for work no matter what, but they’ll show up with enthusiasm and vigor if their workspace presents the possibility for an enjoyable experience.
The article pointed out that while floor space devoted to individual staff members is decreasing “space allocated for amenities is taking up a larger chunk of corporate real estate portfolios,” growing to 10 percent today from 3 percent 10 years ago. Amenities are described as “lounges and cafeterias to health and wellness centers—a whole bandwidth of things that aren’t desks and offices.” Together these are described as placemaking – a place where people like to be.
An Economic Case for Built-Out Space
A prerequisite to speed and flexibility to meet tenant expectations is the provision of what is called a “warm shell” – space with a minimally finished interior, heat and cooling, drop ceilings, plumbing, restrooms and interior lighting. Zoned electrical and flexible HVAC and sprinkler systems can be modified with relative ease to conform to new and future tenants’ floor plans. A warm shell is empty space but ready to lease, requiring only the construction of individual offices and amenities during the build-out.
Thanks to demountable wall systems, landlords can create fully built-out spaces at a fraction of the time and about the same price or less considering all the costs associated with drywall construction. Moreover, while built on spec, demountable wall systems can be quickly modified to meet the tenant’s expectations and answer the question “what is it about this space that wants me to occupy it?”
By tailoring the space to the client’s expectations landlords can command higher rents, provide less concessions and benefit from longer leases. They also reap the benefits of accelerated tax depreciation under IRS Section 179 classifying these systems as furniture and not structural components. If and when tenants vacate the space, demountable wall systems can quickly and easily be reconfigured, making them rent-ready for new tenants. Best of all, office, conference, reception and amenity space can be constructed at approximately $15-$20 per square foot. Think spectacular spec spaces on a shoestring. Well, almost.
Demountable Wall Components
Open, airy, attractive, and exceedingly rentable offices can be built on spec with ALUR system components comprised of demountable frameless glass and solid dividing walls, the latter in horizontal and vertical configurations. These demountable architectural walls allow building owners and landlords to quickly create on-spec reception areas, private offices, amenity spaces, conference rooms and teaming areas in a virtually infinite variety of floor plans.
Sleek, beautiful floor-to-ceiling ALUR demountable glass walls make small offices seem larger, admit morale-boosting natural light from perimeter windows and protect speech privacy with a 36 STC (sound transmission class) rating with ½" thick tempered glass. Visual privacy, where required, is achieved by using frosted glass or by applying film in patterned stock or custom designs. Workspace or workplace entry is achieved with conventional swinging or space-saving sliding glass doors.
Insulated ALUR demountable dividing walls in horizontal and vertical configurations are used to separate work areas fronted and/or backed with demountable glass walls. In the horizontal configuration dividing walls support office furniture including worksurfaces, shelves, bins, tackboards, whiteboards and AV monitors on built-in tracks at 28.5 and 69 inch heights. They also carry concealed power, voice and data cabling systems.
Vertical tile configurations are typically used as space dividers for office back walls where glass is impractical, and at the end of a row of offices.
Horizontal and vertical dividing walls are available in a variety of surface finishes to compliment any office décor and feature a highly desirable 42 STC rating.
As with the demountable glass walls the solid dividing walls are considered furniture, qualify for the tax advantages and readily support fast and efficient office reconfiguration.
Memo to Landlords: “Stage your Space”
In summary, commercial building owners and landlords can take a tip from the residential real estate marketplace. Stage your space and give it “curb appeal” with easily installed and surprisingly cost effective demountable glass walls, dividing walls and office furniture. It works well for model apartments in new residential complexes, new single family residential developments, and in reselling existing residences. It can work for you too.