20 Sep The Evolution of the Open Office
Millennials make up more than 35% of the workforce. In an effort for businesses to attract and retain that generation’s key talent, they have adopted the “Google inspired” office design. This Millennial friendly environment typically includes open workspaces, video games, ping pong tables, napping rooms, treadmill desks, etc. The original theory being, it creates an atmosphere where great minds could collide and collaborate in a relaxed, yet somewhat professional setting.
Studies are now showing that the “Google design effect” creates chaos and distractions. Employees are isolating behind noise cancelling headphones to drown sounds of ping pong, video games and side conversation, resulting in 73% less in person interaction among officemates. This office layout has caused a loss in productivity (approximately 90 minutes per day) in the workplace due to flawed design.
While the “Google inspired” office design has many warts; it became the catalyst for something bigger and better – the all-inclusive, tenant friendly “Concierge Building”.
These Concierge Buildings provide complimentary amenities such as cafés stocked with snacks/drinks, weekly fitness/meditation classes, game rooms, etc. Some even offer non-complimentary services such as dry cleaning, wash-n-fold laundry delivery, and massages to name a few.
The Concierge Building design has been popping up in Class-A buildings over the past few years, providing tenants with all the luxury and services the millennial generation demands without constant in-office distractions. Since the amenities are provided by the landlord, not the tenant, ping pong moves out of the office and into a communal area for all tenants (and their guests/clients) to enjoy. This design also takes “play time” out of the office and into the building’s common areas where noise and other distractions aren’t an issue. This concept is now the standard for Class-A office buildings.
Ultimately, landlord provided shared services are going to move to the next plateau.
Rather than providing useful daily amenities to tenants and their employees, a well-conceived Concierge Building will provide key infrastructure services to tenants wishing to share expensive human infrastructure. For example, many small companies (50 employees or less) have periodic need for HR/IT services but do not need full time dedicated staff for those activities.
This is an excellent opportunity for savvy landlords to provide these shared resources in common among the tenants and secure their building as a key component of the tenants’ basic business operations. As a tenant, if I am a paying a dollar or two per square foot more in my 10,000 square foot suite but have access to valuable IT and HR services then why would I ever consider leaving – it simply wouldn’t be economical.
IT services alone can cost $10,000 per month for outsourced IT services for a small business. That cost doesn’t even include office staff that run around “putting out fires” to prevent onsite IT fees.
In the foreseeable future, Class-A buildings will be providing these services which will allow their tenants to focus their time and money on their core business objectives and landlords get a “sticky” tenant.
Robert Scheer, Founder & President
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