IRVINE, CA—The upgrades and improvements modern offices have been seeing are not just desired by Millennials but also represent a “human element desire for improved quality of life in the workplace,” KBS Capital Advisors' regional president Rodney Richerson tells GlobeSt.com. KBS has been a part of several leasing and acquisition deals that cater to the changing needs in office spaces and has been innovative and “dynamic” in a “dinosaur” industry. We spoke exclusively with Richerson about his experience in this area. Stay tuned for an upcoming feature in Real Estate Forum on this topic.

GlobeSt.com: What have you noticed about Millennials' changing needs for office space in the sales and leasing deals you've done recently?

Richerson: The Millennial Factor in real estate has been a very interesting phenomenon. Our recent experience demonstrates that it's not just the Millennials who want these changes--these type of improvements are a human-element desire for improved quality of life in the workplace. Clean, light and bright space with community meeting space; open meeting areas—not necessarily conference rooms, but seating areas, lounges with pool tables, ping pong and bar-type improvements; private meeting areas and open meeting areas; outdoor space with Wi-Fi; outdoor kitchens. Overall, just great gathering places to work, relax and spend time with co-workers. Some of the best office buildings are offering community space similar to high-end multifamily projects.

GlobeSt.com: What has been your approach to office redevelopment in light of these changing needs?  
Richerson: In almost all cases, we are adding high-end tenant lounges, fitness facilities, bike lockers and bike-repair shops, and when appropriate or possible, great outdoor spaces.

GlobeSt.com: What other trends are you noticing in office redevelopment?  
Richerson: It's been interesting to watch the evolution of office redevelopment city by city. We tried to incorporate great community space in all of our buildings/markets, but the early adopters were Chicago, the Bay Area, the Pacific Northwest, and Los Angeles. Lots of organic materials are being used along with a great mix of seating types: couches, benches and bar seating. Some of our favorite improvements have incorporated roll-up “garage doors” that create versatile indoor/outdoor spaces. However, nothing ever beats the great tenant experience of having a building ambassador who cares about the tenant/employee experience in our buildings. 

GlobeSt.com: What else should our readers know about your firm?
Richerson: Since the economic recovery began to take hold a few years back and we started to see tenants growing vs contracting, KBS switched focus from buying core stable assets to a core-plus model. Our primary focus is to acquire core-plus opportunities that are located in city centers or urban nodes with walkable amenities.

We are less concerned about the quality of an asset (whether it's class-A or class-B) as long as it's well located. It's easy to turn a class-B asset into a class-A asset with the right improvements. We thrive on acquiring class-B buildings that haven't been renovated or amenitized. With the right improvements, you can change the discussion with existing and prospective tenants from rental rates to how easy it will be to attract and retain their top employee talent in our buildings. The cost of a properly amenitized building will be cheaper for a tenant in the long run.

The tenant will not need to build out a large conference facility, large kitchen/dining areas or employee lounges in their space if it's already provided by the landlord. We have seen tenants take 10% to 15% less space in our buildings when they do not need to incorporate large community space into their space plans.