SAN DIEGO—While more office users are being conservative about the size of their rentable space, they are willing to invest in strategic design and construction services, Burger Construction's founder Jack Burger tells GlobeSt.com. We spoke exclusively with Burger about emerging TI construction trends for 2016.

GlobeSt.com: What trends do you see emerging for TI construction in 2016?

Burger: For TI construction and construction in general, the focus is going to continue to move toward a back-to-basics approach with an emphasis on detailed customer service and follow through. Top-level decision makers have lived through extreme highs and lows of the economy in the last 10 years. They have learned that they need to make smart, measured decisions for long-term success and that cost cannot outweigh quality, service and experience. Overall, many companies are being more conservative about the size of their rentable space in order to minimize real estate costs. In exchange, however, they're willing to invest in strategic design and construction services. 

Focus is shifting from a dazzling street address to creating an interior office environment that is reminiscent of a work loft or a Starbucks. That may also include a game room and a tricked-out kitchen, to embrace the employer/employee experience and culture. New locations are popping up in non-traditional areas with a focus on local amenities, freeway access and lifestyle choices. The workforce has a strong preference for working and living in the same area. The senior executives are no longer the driving force for where to locate the office. Emphasis has shifted to vibrant, mixed-use areas that offer a work/life balance with a short commute. These designs appeal to most of the workforce nowadays—not just Millennials, but Millennials are certainly an important focus for companies trying to attract cutting-edge, fresh talent and making sure that their office environment stays desirable for many years. 

Companies are making their commitment to their TI contractor based on the partnership potential. A strong partnership means meeting timelines and staying focused on the client's budget, all the while focusing on the customer experience and attention to detail. The partnership also means working together as a team. The TI contractor is in on the planning process, embraces the vision the client has, and provides detailed quality services with a focus on design-build. The contractor needs to do all this while making the construction process as easy as possible for the client.

GlobeSt.com: What are you noticing about Tis from the landlords' perspective?

Burger: On the landlord side, many are providing "plug-and-play" spec suites so that tenants can move in more quickly and easily put their own signature on a space. Landlords request tenant-improvement work that transforms outdated or shell space into an easily customizable, mostly open space.

Another trend is that office space is being renovated and transformed into lab space as our life sciences industry needs increase. Some labs are being created for use by multiple companies—start-ups or small firms—rather than by just one firm. Whether its office or lab space, landlords and tenants are embracing the synergy that comes with encouraging interaction between not just employees within a firm, but also between neighboring tenants and emerging companies in the same sector. This is also a proven technique for growing industry clusters, which is important to the ongoing growth of San Diego.

GlobeSt.com: Do you anticipate that TI construction will increase or decrease next year, and why?

Burger: We expect an increase. Employment is growing, new firms are emerging and established firms are expanding or reworking their business model with an eye on more-efficient office space and working smarter. We're also seeing a lot of real estate investment activity in San Diego, from both local and national investors, and many of those investors are renovating their acquired properties. All this activity requires modification to office and lab spaces.

Economists say interest rates will continue to increase, but no one expects a rapid rise. Material, labor and production costs will also continue to rise. San Diego's deep diversity of industry sectors and its stellar collection of higher-education institutions will keep our county in the top tier of our nation's secondary markets and red hot for life science, tech, defense and more. We are organically growing our local businesses with a quality labor force necessary for businesses to thrive.

GlobeSt.com: What trends do you see fading in the New Year?

Burger: Due to California's increasingly stringent Title 24 code and other jurisdictional requirements, sustainability now is in the fabric of the building. LEED-certification activity will decrease as building codes will continue to stress sustainability, and tenants expect it to be in place as a standard feature. To build to these new standards, costs have increased, especially in the electrical area. We expect those costs to come down, though, with technological advances on the horizon.  

San Diego had a lot of office product that is three decades old, and that pool of aging buildings grew during tight economic times; landlords were not able to contribute to hefty capital investments. Instead of trying to reuse old tenant improvements, the trend is moving toward renovating, reimaging and rebuilding versus trying to modify and make due. No more "band-aid" mentality.

GlobeSt.com: What else should our readers know about TI construction trends?

Burger: TI contractors must be in inserted in the process to ensure early engagement to work with the design-build process all the way from the beginning to the end. It is important to work with a team that can not only build great projects, but also do so with strong customer service.

Tenant improvement work is a huge component of a company's employee retention strategy, and firms should be willing to make an investment to transform their office into something remarkable; to embrace their company's culture.

TI construction work isn't about a fancy lobby and modular furniture anymore; it's about creating a lifestyle inside four walls, except maybe one of those walls retracts or becomes a climbing wall or has plants growing all over it.