Commercial real estate is a dynamic industry. Keep up with Spaces’ monthly recaps of the most valuable industry articles we’ve recently come across, focused on news in Ohio, Michigan and Pennsylvania.
Office Space Utilization Continues to Evolve in a Digital Marketplace
The business landscape is continually changing to accommodate a dynamic digital marketplace—making significant impacts on office space trends and needs. CCIM Institute examined space utilization trends in a recent article, How Much Space Do We Need? Despite a welcomed office market upturn in recent months, CCIM experts inquire: “Will shrinking footprints slow the office recovery?”
Nationally, businesses have sharpened organizational focus on use of space as it relates to worker productivity. CCIM reported that each U.S. employee occupied about 185 square feet of space at work last year; businesses intend to reduce this number in the coming years. In fact, JLL reported that “…50 percent of desks will be vacant on an average day in a typical company.” This is, in large part, due to the impact of technology.
CCIM predicts that square footage per worker will average between 150 and 185 in the near future; but, there are other factors that impact space utilization decision-making. With smaller square footage per worker, offices will also demand expanded meeting or lounge areas. CCIM continues: “At the end of the day, landlords are not selling space but rather productivity.”
Skyscraper Sales Are Looking Up
So, the question remains, will workspace trends impact the recovery of the office market? There’s no way to know for sure, but recent activity is positive.
According to the Wall Street Journal, skyscraper sales within the office market hit new heights in the past few months. Despite workspace trends, big name companies are making billion dollar deals, including Sony.
“The flurry of deals is producing big paydays for many investors, especially those who purchased during the depths of the downturn.”
– Wall Street Journal, Skyscraper Prices Head North
Grocers Go Green, Sell Sustainability (In Detroit)
In tandem with the CRE industry, grocers have emerged as a leading supporter of green initiatives. As a large contributor to our communities and to our well-being, grocers are making impactful changes to internal business structures. A recent article from National Real Estate Investor investigated a few green grocers, Whole Foods in particular, who are “launching sustainable programs that focus on conservation of water and energy, reduction of truck traffic and zero-waste technology.”
According to The Wall Street Journal, Whole Foods celebrated the opening of its premier Detroit store in June. WSJ reported that Whole Foods noticed a trend in the area toward higher quality food items, lending to future success for the upscale grocer. You can find the new store on Mack Avenue.
News Wrap Up In Our Region
- In industrial news, Koebbe spent $500,000 on new space in Batavia. The building spans 16,700 square feet and will be used for manufacturing purposes.
- In the office sector, UpTech is relocating from Newport to Covington. UpTech signed a five-year lease on Pike Street.
- A $350 million dollar mixed-used development plan was proposed in early June by local leaders County Executive Ed Fitzgerald and Mayor Frank Jackson. Plans include development of a convention center, a pedestrian bridge, parking garage, among other assets.
- Duke Realty entered the market this past month, selling its prime office buildings from within the Northeast Ohio portfolio.
- Worthington Industries Inc. is planning to expand and advance current operations to accommodate for an increase in steel processing capacity. Expect to see changes at its Columbus and Cleveland facilities.
- The Ohio Department of Administrative Services partnered with CBRE Group Inc. to provide property management services at two downtown buildings, including the Riffe Center and the Rhodes State Office Tower.
- Dan Gilbert continued his buying spree in June with the purchase of two buildings on Woodward Avenue. Located at 620 and 630 Woodward, Gilbert is going to transform the spaces into retail and restaurant venues.
- Formed Fiber Technologies was acquired by Detroit Technologies Inc. for an undisclosed amount.
- Due to the local energy boom, Pittsburgh is playing an active role in the office market upturn. By 2035, the energy sector is forecasted to generate 3.5 million U.S. jobs.
- SPTS Technologies acquired Xactix, a “Pittsburgh-based etching systems manufacturer.” Deal details have yet to be released.
Please feel free to add any relevant industry news we might have missed in the comment section below.
Newspaper image via NS Newsflash