In the latest edition of our monthly news brief, JLL’s regional team curates the top industry articles to keep you in-the-know. In this month’s edition, JLL spotlights workplace trends in 2016, the impact of cosharing office space, and what startups need to know when looking for new office space.
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Workplace Trends to Watch in 2016
A new generation (Generation Z) is officially entering the workforce in 2016. After seeing the impact millennials made on office space, we’re expecting fresh perspectives will spark change. According to a recent article from HubSpot, the biggest workplace trends of 2016 will include:
- Employee Transitions: Roughly 3.6 million Baby Boomers (born 1946 – 1964) are expected to retire in 2016 to make room for the first college graduates of Generation Z (born 1994 – 2010). Millennials (born 1980s – 2000s) are moving up the ranks into manager positions.
- New Office Designs: Offices are shrinking, opening up lounge areas and removing barriers between employees to foster productivity and good morale.
- The Technology Takeover: Technology is changing the way employees work. From retrieving information immediately to improving efficiency, technology is finding its purpose in the workplace. Technology may even replace the need for certain jobs—it’s predicted that machines may be able to do half of all jobs in the next two decades.
- Workplace Flexibility: More than ever, flexible work arrangements are driving employee decisions to stay at or leave a job. As a result, more professionals are choosing freelance jobs to have more control over their lives.
For a full rundown on workplace trends to watch this year, check out HubSpot’s article and infographic.
The Cosharing Office Space Revolution
The sharing economy is disrupting business as usual across every industry from hospitality to hired car services. And now, the impact has made its way to commercial real estate (CRE).
Cosharing—the trend of shared office space—is an increasingly appealing alternative to the traditional office space for small businesses and remote professionals. From New York City to Miami, cosharing spaces are taking over. Small Business Labs predicts, “ … more than 12,000 global co-working spaces will exist by 2018 with over one million members.”
The shared workspace trend requires CRE developers to think outside the box to find new ways to efficiently utilize office space, incorporate potential impacts on building infrastructure, and be ready for significant changes to lease administration.
For more, check out JLL’s recommend resources from the workplace strategy team.
What Startups Need to Know About New Office Space
Are you a startup looking for space? To help you understand the process, Andy Effler, Associate in the JLL Columbus office, shares the upfront expenses and risks every startup should be aware of in a recent article for the Columbus Chamber.
- Process: Start by determining goals, objectives and budgets, and then hire a broker who specializes in Tenant Representation to help identify opportunities in the market. Once top options are identified, prepare Request for Proposals for business and economic groundwork items. From there, you’re ready to engage in negotiations and make your way toward a signed agreement.
- Upfront Expenses: All companies should keep in mind the standard upfront costs of finding and relocating to a new office space. Some of the most common include attorney fees, office furniture, moving expenses and security deposits.
- Risks to Avoid: There are a lot of legal matters and business terms in real estate transactions. A few to be aware of when signing an office lease include: signing a Personal Guaranty, providing too much information upfront, not negotiating for tenant-favorable options, and an inflexible lease term.
For more a more in-depth insight, read Effler’s full article.
CRE News Wrap-Up in Our Region
- Quotient Technology Inc., a digital technology company will spend $1.5 million to relocate its Greater Cincinnati operations from Deerfield Township to Sycamore Township. In addition to the move, the company will add 100 jobs.
- After 16 years at Shillito Place, the Cincinnati Business Courier will move its offices to the second floor of downtown Cincinnati’s Mercantile Center.
- Columbus Business First named JLL among the Healthiest Employers in Central Ohio for 2016. Check out the full list. JLL’s Cincinnati office was also named among the finalists for Southwest Ohio.
- Columbus suburban office rent is projected to plateau in 2016; however, the downtown market will continue to bring in new tenants and see rent increases. Contributing to suburban vacancies is the collaborative office space trend.
- The Cleveland-Cuyahoga County Port Authority approved $80 million in revenue bonds to finance the One University Circle apartment building. The development is slated to include 280 apartments, four floors of parking and 4,000 square-feet of street level retail space.
- GlobeSt.com reports that Cleveland has the largest tech industry among big Ohio cities. Cleveland remains a low-cost market with favorable tenant conditions.
- This summer, construction will kick off at the vacated Save-A-Lot in Ferndale. The planned development will bring 90 new apartments to the area.
- The University of Michigan is committing funds from its $10 billion endowment to real estate in the U.S., U.K. and Turkey. Funds will be allocated to firms in London, San Francisco, Seattle, Boston and Istanbul.
- Downtown Pittsburgh looks to improve vacancy and rental rates and appeal to the growing population in the downtown area. A project to restore the landmark Macy’s department into a one-million-square-foot space for luxury apartments, retailers, restaurants and entertainment spots is predicted to bring business back to the area.
- Pittsburgh Business Times revealed that Crown Castle might expand at Summit Corporate Center in Southpointe.
Keep up with trends and relevant commercial real estate news throughout the Great Lakes on Twitter at @JLL_Spaces!