Commercial Real Estate Finance

As I’ve discussed from time to time, culture is a major factor when investing in, developing, or operating commercial properties. The ways in which people congregate, work and live are shaped by their buildings and dwellings. But these properties are impacted equally by social tendencies, as the New York Times discusses in a recent article about our ever-changing workplace culture. Nowhere is the impact of social trends more evident than in the office sector.

In recent years, many companies have adopted the “open office” model of working environment, hoping to increase collaboration and productivity by removing office and cubicle walls. This model has been around for decades in certain businesses (trading floors, newsrooms, laboratories, etc.) but has gained wider popularity in the 90′s and 00′s, especially among high-tech or entrepreneurial companies. Naturally, operators and developers have been forced to keep pace, ensuring their tenants’ commitment by building or renovating suites according to these trends.

Even older buildings, such as the iconic Empire State Building, are receiving such upgrades to entice a younger generation of company. But the evolution of the office brings new challenges. As the New York Times article describes, one of these challenges is noise. While cubicles and cramped offices are often received with dread or Dilbert-esque humor, they are naturally much better at containing the racket of phone calls, conversations, and squeaky chairs. NYT reports:

…researchers at the University of California, Berkeley, report that more than half of office workers are dissatisfied with the level of “speech privacy,” making it the leading complaint in offices everywhere.

That applies to both our speech and others’. To be sure, companies must find solutions to prevent sensitive conversations from traveling, but even more essential to workplace productivity (and let’s face it, peace of mind) is finding a way to dampen the distracting chatter of coworkers. One solution is sound masking:

Companies are redesigning offices, piping in special background noise to improve the acoustics and bringing in engineers to solve volume issues. “Sound masking” has become a buzz phrase.

Like those little “white noise” machines people use to get to sleep, only on an office-wide scale. Features like these, as well as private meeting rooms or even diner-style booths (below) are gaining popularity, though many of these solutions may be company-specific and unlikely to gain greater traction in the business world.

As Coy Davidson explains on the Tenant Advisor, “coworking” (independent workers sharing a single open space, as well as the resources and “creative energy” of said space) has much more to do with culture than furnishings. Operators and developers would be wise to keep up with these changes. With a few exceptions like Manhattan and San Francisco, the office sector in the U.S. is far from a seller’s market. A few features to promote an office’s productivity–such as sound-dampeners or diner booths–could win over new tenants.

…Or, let’s be honest, they could be ripped out to make room for the next trendy office feature.

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