4 Trends We’re Expecting in the Office Sector for 2019
One of the biggest shifts in the office sector we have seen so far is the approach toward changing the workplace to enhance creativity and give tenants an all-encompassing experience while at work. Many companies are going a step further to attract and retain top talent and beginning these efforts by creating an office environment that is attractive and collaborative.
Let’s take a look at four trends we’re expecting in the office sector for 2019.
A Greater Emphasis on Amenities
Attracting and retaining top tenants all boils down to the amenities. Landlords and property owners are boosting the amenities in office buildings to include everything from onsite dry-cleaning services to valet parking. The competition is fierce to keep office buildings leased. For new office developments, you can expect to find rooftop terraces and plenty of outdoor space that tenants are looking for.
According to NREI, the 10 most wanted office amenities are:
- Fast, reliable elevators
- Unobtrusive, fast turnstiles
- Accessible food options
- Rooftop deck
- Alternative commuting options
- Modern fitness center
- Shared conferencing space
- Tenant lounge
- Distributed Antenna System
- Fast, reliable Wi-Fi
Collaborative Work Environments
If it seems like the coworking concept is everywhere, it’s because it is. So many different industries are jumping on the co-working wagon and implementing different types of spaces in their offices to give professionals a multitude of places to work. CBRE’s 2018 Americas Occupier Survey found that the majority of corporations anticipate rolling out unassigned seating plans and mobile apps to enhance the workplace experience in the next three years.
More Office Downsizing
As millennials continue to shake up the traditional workflow, we will see more companies consolidating space since many employees will work remotely or offsite in coworking spaces. Technology has allowed professionals to work from anywhere, which means there will not be as big a need for a large 100,000 square foot+ space office space. According to NAIOP, over the past ten years, occupiers have been allocating less square footage per employee. The national average is 194 square feet per employee, which is down 8.3 percent from 2009.
Parking costs are increasing, especially in urban central business districts and it is becoming more difficult to offer as many parking spaces as necessary for a modern office. We will see professionals begin to take other forms of transportation such as ride-sharing, walking, trains and buses to get to work. According to NAIOP, the average monthly cost for an office building parking spot ended 2017 at $183, which was up 6.4 percent on average from the previous year.
These are just a few of the trends we are expecting to see in the office sector in 2019. From an increased emphasis on amenities to companies continuing to downsize, we anticipate the office sector will shift in a positive way in 2019. We also expect concessions such as free rent and tenant improvement allowances to increase due to increased construction and a pending slowdown in hiring which decreases the demand for space.