Check these guys out. They are taking the San Fran office market by storm using the right integration of technology and aesthetics in the website.
I will give some more input on their model and site later, but for now I wanted to pass along some press and praise for the guys in SF:
More to come.
Happy New Year!
Hope everyone had a safe and enjoyable holiday. I have a few articles coming your way in the next week, but for now let’s start the year off right . . . let’s be a little random.
1. If you aren’t setting your goals for this year, then I won’t feel sorry for you when your peers pass you by. Plan to go somewhere and do something. Whatever it is, just shoot for SOMETHING.
2. Being social is expensive. If I were to rejoin ULI, NAIOP, ICSC. AYREP, and CCIM, my dues would be well over $1000 for the year. Doesn’t that seem excessive?
3. You know who could potentially make decent money in this market? A head-hunter. Submitting resumes on SelectLeaders is a waste of time. Most hiring managers are so inundated with resumes that a new hire is almost more work than it is worth. I’m telling you, a good headhunter is worth the fee all day every day.
4. I didn’t really learn anything new from Dave Ramsey (because I am a finance dork and didn’t need to be told what a “mutual fund” was), but I am glad I took Financial Peace University with my wife before we were married. It was good to get us both on the same page financially and it helped facilitate our necessary conversations about money. Check it out here.
5. I just plain don’t like working out at LA Fitness. Am I the only guy who is there to actually workout? I don’t want to flirt. I don’t want to flex in front of the mirror. I don’t want to watch the scantily-clad girls do copious amounts of lunges. Just lift. You know what I need? I need the gym from Rocky. The worse it smells, the better.
6. I’m pretty much done with Mike Bobo. He’s a nice guy and all, but how many teams have come and tried to recruit him away from the Dawgs? Thinks about that . . .
7. This is an interesting article about an unexpected byproduct of the tepid office leasing market.
8. Katy Perry and Russell Brand are splitting up. What a total and complete shock that is . .
9. Ayn Rand can teach you a lot about CRE. I don’t agree with everything she says or proposes, but she and I both dig unadulterated capitalism in a big way. If you behave, then I’ll write an article about it.
10. As a real estate guy, I love density. I think the merging of uses into a single property may be the greatest trend of our (CRE) generation. But I will never give up my car. There is something freeing about knowing I can hop in my car and go anywhere anytime I please. And driving through the city on a sunny Sunday afternoon in the Fall is just a few steps away from heaven. I don’t care how dense it gets around here. You’re going to have to pry that steering wheel from my cold, dead hands.
Happy January and Roll Tigers!
Mark Elliot wrote an interesting piece in today’s Real Talk on the ABC. He talks about why office space is changing and how office space will look in the future. (http://www.bizjournals.com/atlanta/real_talk/2011/02/what-next-gen-offices-may-look-like.html?ed=2011-02-03&s=article_du&ana=e_du_pap)
First of all, let me say that I think Mark does a great job on Real Talk. Not to take away from Ray or Abe or Wes, but I always seem to enjoy his posts the most.
Secondly, Mark raises a valid point here, but I think he may need to include a few more variables.
He argues that large office spaces will be shrinking over the next several years due to the shrinking corner of office , reduction of on-floor amenities (large lobbies, breakrooms, etc.), and increased layout efficiency.
I would agree that all of these factors are legitimate and are probably already taking place. As backlash against what was perceived as lavishness of Wall St executives in the PGR days (Pre-Great Recession), executives and managing directors have seen their compensation and benefits heavily scrutinized and cut back. I would say that a vast corner office with room for a chipping green would fall into that category.
As for on-floor amenities, I am sure that most offices will continue to have breakrooms and work rooms with printers, faxes, mailboxes, etc. What I expect to see falling in greater numbers is the storage or file room. With the increased availability and efficiency of cloud-computing and online storage capabilities, why do you need a paper copy of old data in a huge filing cabinet down the hall? Sure, you may want to keep a hard copy of deal info on your current deals and maybe the deals you have done in the last year or two. But that 250-page appraisal from the deal you closed 8 years ago can probably take a vacation to the shredder.
Don’t get me wrong; I think there will always be a need for some on-site storage. But I think I could get away with a two drawer file cabinet at my desk and have all the storage I need (given that I have plenty of online storage).
As for efficiency, I think you will see a slight bifurcation in the market. I think creative companies will continue to demand unique (odd?) layouts and typical service providers will go for the vanilla, uber-efficient space. To Mark’s point, I would argue that a larger portion of office users are service providers that want the vanilla space.
Another factor that Mark omitted is the telecommute option. What do you need to do at work that you cannot accomplish with your Blackberry and laptop at home? The answer is usually “very little.” I’m going to assume that there will always be a space for employee interaction and conference rooms, but we are seeing increasing numbers of telecommuters with every passing year. That trend alone may lead to a slight drop in demand for office space.
So I agree with Mark’s point, but I’m not sure the shift will be as cataclysmic as some have opined. To paraphrase Malcolm Gladwell, there will be a tipping point. At least there will be a tipping point in Atlanta.
The fact is, Atlanta is a growing and expanding city and job market. Strategically located in the heart of the Sunbelt, Atlanta has long been known as the Capital of the South and seems to be the market to beat in terms of corporate relocations and expansions. Simply put, if you want a presence in the Southeastern U.S., Atlanta is usually your first choice. (Take that Miami!)
More people continue to move into our city and demand white collar (office-occupying) careers every year. So, since the office space equation has two components, available office space (supply) and demand for office space (demand), the two components can balance each other out.
That is, I agree with Mark that office users will demand less space and be more efficient with the space they do occupy. But I would also argue that Atlanta is going to continue to attract its fair share of corporations and companies that will demand new space. These new companies will, in theory, occupy the spaces left vacant by downsizing firms that already occupy space in the market (aka, Positive Absorption).
The crux of the issue will fall to the office developers of the city. If developers can keep from oversupplying the market with product, I would assert that the office space market will remain healthy and may even tighten (15% overall vacancy instead of 20%). If (more likely) developers get a little overzealous and chase the margins, we may see perpetually high vacancies.
Which will it be? I guess we will have to wait and see . . . .