PLACES

05:47 pm
03 April 2018

Rise of the Creative Office – Creative Office Space Helps Mixed-Use Properties Target Millennials, Tech and Design

Rise of the Creative Office – Creative Office Space Helps Mixed-Use Properties Target Millennials, Tech and Design

Mixed-use properties have long thrived in part because they are carefully tailored to the demographics of their market and their consumers. This strategy remains crucial but as the workforce demographics and culture shift in major markets across the country, mixed-used properties must be more flexible than ever before in meeting the needs of not only consumers, but also of tenants and local business owners. In urban areas, industries such as entertainment, design, publishing and technology – as well as the workforce of young professionals they attract – are shaping the office real estate scene. As a result, there is one major emerging trend that has demonstrated strong and growing appeal for mixed-use properties in city neighborhoods: the creative office.

Creative office spaces have long been popular within the technology and innovation sectors. Companies like Google, Facebook, and Apple occupy notoriously sprawling campuses featuring open floor plans, creative design, and on-site amenities like gyms, game rooms and catering services for employees. In fact, the creative office has become synonymous with the culture of the growing technology/innovation world: laid-back, open and consistently modern.

Creative OfficeSo it’s is no surprise that the creative office concept is now branching far beyond Silicon Valley. Technology companies and smaller technology-based startups are moving into city centers across the country with an especially strong presence in Seattle, Los Angeles, San Francisco, Austin and New York. In these cities (and others), technology entrepreneurs attract hoards of young, urban employees, many of whom enjoy significant disposable incomes. Incorporating creative office space into a mixed-use retail property can create significant buzz around a center and also attract high-value tenants who understand that convenient retail, dining and entertainment options increase their space’s desirability. As a further sign of creative office popularity, The New York Times recently estimated that “virtually all American workers now spend time on teams and some 70 percent inhabit open-plan offices, in which no one has a room of one’s own.”

One of Madison Marquette’s most recent acquisitions, the Bellevue Galleria, exemplifies a synergy between office and retail offerings. Located just outside Seattle, the Bellevue Galleria features 30,000 square feet of creative office space. This space has been leased to gaming company Bungie, once a Microsoft-owned start-up, now independent and the creator of the popular video game Halo. Other anchors include LA Fitness, Gene Juarez Salon, Men’s Wearhouse and Rock Bottom Brewery. These businesses provide appealing amenities and entertainment options for not only the creative office tenants but also for scores of other young professionals in the area.

The Bellevue Galleria plays to the Seattle changing demographics. According to a 2013 Forbes article, the Seattle metro area has experienced a 45 percent growth in technology employment over the past decade – a trend that shows no sign of slowing. Bellevue itself is already home to several internet and gaming companies, friendly competitors of Halo, not to mention branches of HTC and Microsoft. The area is fostering larger numbers of start-up technology companies while established companies like Amazon, Groupon and eBay are expanding their presence in the area.

Creative office-centered projects can also help revitalize waterfront neighborhoods or energize urban infill projects. In Brooklyn, previously empty “warehouse” space on the Hudson River has been transformed into loft offices, condominiums and street front retail with extraordinary success. Creative office projects such as 1000 Dean, the Domino Sugar Factory and Industry Warehouse have made the previously sleepy borough into one of the hottest real estate markets in the country. Brooklyn has 2.5 million residents and is increasingly pulling tenants from surrounding boroughs as it provides innovative shopping, working and entertainment space.

The same is true for San Francisco’s Mid-Market neighborhood. In 2012, Twitter announced it was leasing office space in the dormant Market Square. Other companies soon flocked to the area, including music-streaming service Spotify and popular mobile payment company Square. In addition, a flurry of retailers signed on to Twitter’s HQ and the adjacent buildings to capitalize on the sudden influx of young employees. This once-dormant section of San Francisco is now home to numerous technology companies, as well as over 30 mixed-use construction projects. Projects include apartment buildings, fitness chains, art groups, grocery stores and more – all anchored by the boom in technology companies leasing creative office space.

As the profile of companies who tout the advantages of creative offices rises, so too does the demand – from employers and employees alike. Today, creative office leases are no longer limited to an elite group of technology and digital brands. Companies from more conventional industries have begun to embrace the benefits of a creative office, including financial services, real estate and even law firms. A unique office can be seen as a statement of a company’s singular culture and can help companies remain competitive in recruiting.

In addition to the appealing environment required by these tenants, the utilization of space is much greater than for a traditional office. A typical open plan office will pack employees into 100 to 200 square feet, less than half the space typical 15 years ago. This increased density creates greater demands on restrooms, heating and ventilation systems, exiting and parking.

Many arts and publishing organizations have also embraced the creative office. In addition to open floor plans, these companies may focus increasingly on striking design and artistic elements. As an added bonus, historic or unorthodox buildings have recently become popular among industries seeking alternative headquarters. Repurposed buildings such as railcar terminals, manufacturing buildings or postal facilities can give a distinct look and a prized historic feel to an office.

Madison Marquette’s own La Brea project, which is located on the popular Los Angeles shopping thoroughfare, contains creative office space in restored buildings with eclectic and emerging local retailers. Thirty-thousand square feet of La Brea’s office space was leased to creative brand consulting agency Troika. The remainder of the building is leased primarily by hip, emerging retailers like Steven Alan, A+R home design, Gant, Bonobos, and SugarFish Sushi. The office and retail space capitalizes on the building’s natural properties, such as exposed brick and ceiling timbers.

The La Brea project reflects the neighborhood surrounding it, an area heavily influenced by fashion and film. A mural by Shepard Fairey creates an outside aesthetic that reflects the modern and creative nature of the retailers, and events such as block parties and an annual Fashion’s Night Out event serve to further integrate the property into the community. Overall, the project’s many elements combine to create a unique destination that is much more than the sum of its parts.

Clearly, we have entered a time when companies across multiple disciplines – from art and design to technology, research and blue chip professional services – are seeking competitive advantages to maximize efficiencies and quality of life. Creative office spaces provide optimal opportunities for businesses to thrive, for workforce collaboration and innovation to occur and for success in mixed-use environments where retail, dining and entertainment become an essential offshoot of the holistic work experience