Today, Office Needs a Disruptive Model

Adopt a disruptive model. That was the opening advice that John Kilroy of Kilroy Realty Corp. offered the impressively large audience at Allen Matkins’ annual View From the Top conference yesterday at the Beverly Hilton Hotel in Los Angeles. Kilroy Development has leaned on a model of disruption—what some might call innovation—this cycle with its experience-infused office campuses along the West Coast. In his address, Kilroy outlined the five characteristics needed to develop a quality office space today: location, well-designed environments, experience and amenities, sustainability and technology.

“If you don’t like change, this isn’t the place for you,” Kilroy, the chairman of the board, president and CEO of Kilroy Realty Corp., said at the event, stressing the importance of embracing and anticipating change. Today, companies are approaching talent acquisition and retention much differently, and are looking to the workspace as a tool to attract and retain top employees. While location and design have always been important to real estate developers, now amenities, sustainability and technology are sharing an equal weight. “People want live-work balance,” he said. “People want to work where they live. A great job isn’t enough anymore. People want a great life.”

The importance of location has encouraged the firm to sell most of its suburban office product this cycle and focus on populated markets near talent centers with access to housing and public transit. In terms of the design, Kilroy wants properties that are people focused and bring the inside outdoors. Most importantly, he wants 100-year properties, or properties that can withstand the test of time.

While these five pillars have equal weight in the success of an asset, Kilroy focused on sustainability in his speech. “I am convinced this is the most pressing issue of our time,” he said. Kilroy is set on being a leader in sustainability. Currently, half of the company’s portfolio is LEED certified and 73% is energy star certified. Kilroy has also made a commitment to become 100% carbon neutral by 2020. They are the first company in the US, the third and largest company in the world to make such a commitment, illustrating commitment to the sustainability. The cause is especially important, he explained, because real estate is responsible for 40% of the total carbon footprint, and as a result, he urged the audience to “hop on the sustainability platform.”

Kilroy’s latest projects are emblematic of these five pillars. From Oyster Point and Flower Mart in San Francisco to Academy in Hollywood and One Paseo in Del Mar. And he is attracting quality and innovative tenants that are leading disruption in their own industries, like Drop Box, Cruise Automation and Okta. “It isn’t just about architecture. It is about people spaces,” he concluded. “These projects embrace everything I have been talking about in spades.”