Will These Trends in Office Leasing Continue in 2019?

January 9, 2019
Written by: Keli Colby, CREW Washington DC

Technology driven trends brought continued change to the way the commercial real estate industry approached marketing, leasing and the building-out of commercial office space in 2018. These trends included the use of the very hot PropTech (property technology) platforms to market space; the continued rise of smart buildings; and providing tech enabled space as part of a lease’s amenities package. Moving in a different direction, the open workspace concept was a trend that began to reverse course.

PropTech platforms are one of the hottest trends in commercial office leasing. Companies are looking for ways to search for space other than through the traditional broker-tenant relationship, and PropTech platforms enable building managers to create a direct line of communication with future tenants.

A building manager enters available space in its building on the platform and keeps the information up to date. A company can conduct a search for space on the platform, similar to the way a homeowner would utilize a platform such as Zillow to find a home. The building manager can also communicate directly with the prospective tenant, keeping them up to date on available space in the building. The platform also provides means for a company to work with the prospective space—for example, the floor plans. It also collects data on tenants’ demands, including what type of amenities and space they prefer, and what rates are in demand.

Tech enabled space and smart buildings also shaped the commercial leasing market last year. Landlords are offering access to connectivity as part of the lease’s amenities package, particularly in cities with tech hubs. This type of space is known as tech enabled space. Tenants are frequently looking for smart buildings with high speed internet, quality cellular connections, and the latest technology. WiredScore and Radius Global are companies that can be hired to rate an office building’s connectivity, which can be used in marketing the building to prospective tenants.

open workspace concept

The commercial office world started to move away from open workspace concepts in 2018.  While once promising more collaboration among workers—ideally resulting in more productivity—the opposite may be proving to be true of open workspaces. A Harvard Business School study by Ethan Bernstein in July 2018 found that open workspaces actually lead to decreased face-to-face interactions between workers. Bernstein’s study found that open workspaces can make workers less productive due to issues including acoustic privacy, and the inability to focus on execution based tasks or creative tasks. As a result, some workers prefer to work at home or send an email rather than walk over to someone in the office to chat.

Some companies, however, have had huge success with open workspaces. For example, Facebook has successfully implemented a very large open workspace (430,000) at its headquarters. A Harvard Business Review article by Brandi Pearce and Pamela Hinds (January 2018) suggested that this success is related to how the new space is presented to employees and how invested they feel in the space. This concept is coined “place identity.”

Due to the lower cost of open workspaces, they are unlikely to be completely eliminated. Office furniture companies are responding with unique fixes to the problems including couches with blinders and other furniture dividers and phone booths.

Technology brought change to the way we approached marketing, leasing and the building-out of commercial office space last year, and these trends will likely continue to push industry change in 2019. In addition, we will continue to watch the direction of the open workspace concept and other older trends as workplace needs and amenities evolve.


Keli Colby

Keli Colby has more than 28 years of experience in real estate law. She has handled major real estate projects and transactions in the Washington, D.C., metropolitan area and nationally. Her experience includes nearly 15 years as in-house counsel at Boston Properties, Inc., a prominent national real estate investment trust (REIT), and more than a decade as counsel. Colby is a member of CREW Washington DC and served on the 2018 CREW Network Communications and Editorial Committee.

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