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DALLAS—Tech is arguably the single-most pervasive influence on the workforce in this century, and studies continue to bear this out. Two takeaways from the most recent JLL Tech Trends report are an example.
A tech office is 15% cheaper than traditional spaces, and hard costs and materials are 21% lower in tech fit-out budgets than traditional offices. In another report by JLL, there were six key findings about tech: talent, space costs, reversal of density, flexible space, the influence of generations and the cost of living.
With more than seven years of economic expansion (the longest-running since post-WWII) under our collective belts, competition for the best and brightest is at an all-time high. Job openings hit a new record in October at 6.2 million, with no signs of a slowdown. On the other hand, low unemployment (4.2%), paired with low labor force participation (63.1%), remain hurdles for the economy at large and employers are getting increasingly more creative. Because of this, more secondary and tertiary markets may be the beneficiary of corporate expansions, which should continue to spur tech clustering and allow smaller startups to stay local in the future.
“I think it's a lot of fun to take a look at what companies are doing as far as attracting talent; much of it is driven using distinctive and exciting office buildouts across the country,” Ali Greenwood, vice president with the JLL data center solutions team tells GlobeSt.com. “I spend a lot of time in the tech sector and every time I go into a Dropbox or LinkedIn office, I find it fascinating to see the unique things they're doing to attract new talent. The workplace is an extension of who you are as a company. For the employee, it's an extension of your lifestyle.”
The adage “it's all about location” is truer now more than ever, but equally critical to the real estate discussion is the human experience. Companies should focus on three tenets of the human experience model: engagement, empowerment and fulfillment. So while a nicer office, location and amenities may cost more, what a company will get in return is worth every penny, the report says.
During the course of both this economic cycle as well as this real estate cycle, trends toward efficiency have dominated. From micro apartments to car sharing to co-working and beyond, the drive toward a less-is-more ownership mentality on a personal and corporate basis has completely transformed the way things work. As a result, the concept of the personal office has been largely eliminated from a technology company's space design. In addition, personal workspace has been reduced from what was once an industry standard of 350 square feet per person during the dot-com days to as low as 50 square feet per person today.
Companies are now setting up shop in co-working centers, placing teams into these spaces for a variety of reasons. Flex office options offer additional options on short notice without sacrificing culture. There may be a blurring of lines between not only traditional co-working centers and the traditional office, but also hotel lobbies, coffee shops, retail banking centers and office common areas as well.
Millennials outnumber the boomer generation and the youngest of those are just now graduating from high school. As Millennials come of age, they will be buying homes and raising children. That housing may not look the same as the previous generation's but the younger group will want to ease work-life balance. The suburbs are not dead, even though there's a shift toward downtowns across the country.
Housing is expensive, especially in markets that have benefited from booming economic conditions thanks to an expanding tech industry. Talented tech professionals will remain in the top markets, but there are many more who want all of the quality of living without the cost.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
