The Future of the Workplace
by Sandra Cook • September 1, 2017
For the past century, communication and the means by which we communicate have shaped how we work together and the places where people work. From telegraphs to telephones, typewriters to super computers, fax machines to the Internet, mobile phones to mobile computers, it’s people communing with people that makes the world of business go ‘round and drives workplace design. Yet even given the ever-expanding array of technologies literally at our fingertips, face-to-face conversations remain essential.
Jonathan Brinsden, CEO of Midway Companies, recounts how the late 20th century saw an explosion of working from home and growth for independent contractors due to the proliferation of the Internet while the 21st century has been more about collaboration and entrepreneurship.
“We first saw technology as a means to disperse talent, or give people the freedom to work anywhere,” says Brinsden. “But there’s such a natural attraction to collaboration that today we see technology as a concentrating factor for talent, both in certain cities and specific districts within those cities. And it’s that concentration of talent that attracts more companies and more talent.”
More Than Just Square Footage
“Throughout history, the workplace has always had to change with the times,” says Dean Strombom, AIA and principal at Gensler. Strombom cites the newest buildings Downtown, such as Hines’ recently opened 609 Main and Skanska’s Capitol Tower, (designed by Gensler and currently under construction) as the latest standards for today’s office environments.
“Drawing from Hines’ more than 50-year legacy, our goal is to continue to take architectural design and efficiency to the next level,” says John Mooz, senior managing director for Hines. Pushing the envelope is exactly what Hines has done with 609 Main, Downtown’s newest landmark building. The thoughtful and innovative design gives office tenants “wow moments” throughout the building including amazing views of the city while providing must-have amenities such as a hotel like lobby with a yet to be named signature restaurant and the soon to open Prelude Coffee & Tea by local guru David Buehrer. “We feel 609 Main exemplifies that ideal to create an even better workplace and human experience.”
To stay competitive in both productivity and in attracting and keeping talent, companies are seeking much more than X-thousand square feet, more than X-number of floors of Class A or B office space.
Commercial real estate owners and developers are addressing the need to stay current and/or ahead of trends to be able to maintain or increase rental pricing and occupancy rates. And that requires investing, not just in fresh paint and flooring, but rounding out the package with appealing on-site amenities and design upgrades in lobby spaces and distinctive Downtown curb appeal.
“The simple truth is that buildings compete on cost and performance,” says Strombom.
“Older buildings can easily get on a downward spiral of lower and lower rents in order to keep attracting tenants. To avoid that slide, property owners need to invest in updates and redesign for the present day and for the future.”
One large-scale example is Brookfield’s efforts with Allen Center. The global property owner and management firm is spending more than $48 million to change the way the seven-acre, multi-building complex looks and operates inside and out. To tap into the vibrancy of Downtown, Brookfield is updating the office complex, which contains the largest privately held green space in the CBD, by activating the street-level spaces with new restaurants and retail, in addition to amping up activity on its central green.
“Our plan is to freshen up the office buildings we have and develop the common green space into a vibrant center for activity, which will deliver a truly interesting mixed-use environment that hasn’t previously existed Downtown,” says Travis Overall, executive vice president at Brookfield Property Partners. “A mixed-use environment like Allen Center needs to be open to the community and invite different people to come and have different experiences. Otherwise, if it’s just the same people every day, it’s not as interesting and there’s less potential for new connections to happen.”
Brookfield plans to host live music and art events in Allen Center’s central green space, which is being reworked by Houston-based landscape firm OJB (the Office of James Burnett) to serve as a dynamic gathering space.
Gensler’s Strombom predicts properties such as Houston Center and the Esperson Building will likely go through the same type of full-scale makeovers when those well-placed parcels are purchased.
Jonathan Brinsden is pleased to see the revamping of Allen Center and applauds Brookfield’s strategy. “Going back 10 years to the development of CityCentre, Midway saw that the workplace was beginning to change,” says Brinsden. “We saw this in other cities around the country and around the world. There was this desire to not office in a stand-alone office environment, but having access to amenities was important. That old way of simply renting generic office space — just square footage — is not enough anymore. The concept has transformed from ‘space’ to ‘place’ and it’s about providing a holistic environment.”
Standing On Innovation
Recent technology in building construction offers a tremendous improvement in air quality and HVAC efficiency. Gensler’s Strombom notes the under-floor infrastructure of Hines’ recently completed office tower, 609 Main. “This is an example of what office buildings of the future will be.”
Under-floor systems currently being incorporated into new buildings offer a huge leap forward in air quality and energy efficiency, plus convenient location of electrical and data lines that can be accessed through floor panels by placing all of those systems within a one-foot compartment that runs beneath each floor of a building.
The genius of under-floor air distribution, or UFAD, has excited both engineers and building owners with its highly efficient method for delivering conditioned air via floor diffusers directly to office areas, using much less energy than traditional HVAC systems. Each individual can easily control his or her air temperature by dialing a floor register open or closed. And with electrical and data lines placed beneath floor panels, reconfiguring office space is greatly simplified.
“For decades, the No. 1 issue that property managers of office buildings deal with are hot and cold calls about HVAC,” says Mooz. “This new type of system eliminates that.”
In recent years, Hines has incorporated the under-floor systems in buildings for Hillcorp’s Downtown tower, plus other corporate build-to-suit projects outside the CBD for clients such as Amegy, Devon Energy and Shell.
“For 609 Main we took the proven advantages and efficiencies of these systems into a Downtown, multi-tenant office tower,” says Mooz. “This very different, low-pressure system delivers better air quality for people to breathe and simpler tenant control of temperature.”
He explains that a wide channel of air under entire floor flows at a relatively low pressure into floor registers, so cool air gently rises through the room to cool people on its way to return air system, resulting in all occupants on the floor getting the same quality of fresh air — a big improvement over traditional HVAC.
“This is also extremely helpful when tenants need to reconfigure their office space, says Mooz. “There’s much less inhibiting infrastructure of HVAC, electrical, so there’s no need for re-engineering, permitting, or even build-out. With the quality and availability of demountable partitions (movable walls), carpet squares and versatile furniture, you can feasibly reset your office layout over a weekend.”
Mooz says his company is convinced that buildings of the future will seriously consider under-floor systems and it will likely become the new standard.
“It’s worth pointing out that the more technology fuels the mobile work style then more and more companies will require less real estate, less square footage, than in the past, but require more flexibility and functionality per square foot,” Strombom says. “Because Downtown is such a hub of the overall market, the more generic buildings in the suburbs may start to suffer because they are not surrounded by the mix of amenities and cultural fabric of Downtown.”
CBD = Cultural Business District
The entire CBD is an extension of each business, and property owners and tenant companies can embrace their Downtown location by reinforcing connections to the greater Downtown landscape via building design and engagement with nearby happenings.
Look at what Midway has achieved with GreenStreet, which is now near the midpoint in the company’s ultimate repositioning and execution of the project. “A large part of the repositioning was developing a different type of workplace,” says Brinsden. “And the last two years the office market has been more challenging that we had thought, which means we’ve moved slower than we’d hoped, but this has given us time to better determine and attract the right profile of tenants. The office space at Greenstreet is suitable for a very specific type of tenant. We’re not trying to compete with other types of buildings.”
Midway is pleased to have recently signed Spencer Ogden, the London-based recruiter, who is known for a creative style of office environments. Midway is also talking to medical technology firms looking for locations outside of the Medical Center, co-working concepts and technology incubators. “By building momentum with the right type of tenant, it draws others and builds synergy for the whole property,” says Brinsden.
Part of the company’s challenge with GreenStreet was that initially a significant amount of demo and revamping was required to reinvent and reinvigorate the former Houston Pavilions property. “In addition to construction beginning on Hotel Alessandra, Dallas Street was also being rebuilt, so we had a good bit of construction around for the past two years,” says Brinsden.
Brinsden says Hotel Alessandra is on-target for its planned opening this fall. “The hotel is an important third component for the existing retail and office space at GreenStreet,” says Brinsden. “It offers a dynamic 24/7 social environment and regularly draws new and unique people to the project who might be guests or coming in for the great bar or restaurant at the hotel.” Midway partnered with Valencia Group to operate the hotel, the same company that operates Hotel Sorella at City Centre.
Similarly, Brookfield’s plan for Allen Center seeks to infuse the major office complex with a lively street-level scene and a host of activity on its significant green space. “Our place-making strategy transcends just owning a managing bricks and mortar structures,” says Travis Overall. “We aim to make lasting impression on the neighborhoods and communities in which we do business. Today there is great focus on collaboration and creating experiences that are unique for our tenants and the communities.”
Expanding the boundaries of Allen Center, Brookfield purchased the DoubleTree Houston in 2016 and has room upgrades and exterior remodeling in the works. The company also hopes to acquire additional nearby buildings to grow their project even further. “We are also excited about potential changes to the highway system, which could directly connect Allen Center to areas such as Buffalo Bayou Park and the Fourth Ward,” says Overall in reference to TxDot’s proposed North Houston Highway Improvement Project.
Over on Main Street, Midway and owner Lionstone are redeveloping two historic buildings, 708 and 712 Main. The smaller of the two, 708 Main, known as The Great Jones Building, was built in 1908 and features 10 stories. Its neighbor, 712 Main, is familiar to most as the JPMorgan Chase Bank Building. This 36-story gem, built by Jesse Jones in 1929 as the Gulf Building, was the tallest building in Downtown from 1929 until 1963 and the first tower to feature architectural treatments on all four sides.
“We stepped back and saw this as an amazing opportunity to breathe new life and vitality into this wonderful asset,” says Brinsden. Midway has joined the two properties under one name, The Jones on Main, which will also be physically connected and feature appealing public spaces, including the announced Currency Lounge, a future food hall and other retail merchants.
“So many buildings Downtown are known by just a street address,” says Brinsden. “We wanted to infuse a sense of place by giving this destination an actual name, which we had in mind after we had only acquired 712 Main.” While assessing how to solidify that concept, Midway jumped at the opportunity to acquire 708 Main, allowing The Jones on Main to include two neighboring buildings on the same block.
“Initially we didn’t know exactly what we were going to do with that building,” says Brinsden. “But then the opportunity to lease the entire building to WeWork presented itself, so that validated Midway’s ideas to focus on activating the project with a food hall and a great lobby lounge, both complemented by a co-working space.”
Brinsden highlights that, today, peoples’ lives are less segregated than they were years before. “People want to connect the pieces of their lives — work, family, entertainment, socializing,” he says. “And it’s also about having the time. How do you provide an environment that allows tenants and employees to be efficient at enjoying these things regularly.”
He explains that companies are not only interested in the utility of space, but also require their work environment to drive the company’s brand or culture. “In today’s competitive work environment you have to find work environments that help drive that culture and help draw and retain talent,” says Brinsden.
Urban sociologist describe the concept of “third place” as the places outside of work and outside of home that people choose to go, such as fitness facilities, sports stadiums, restaurants, parks, performance halls and live music venues. Those places may be for leisure or business purposes. Downtown Houston’s distinctive context facilitates what business psychologists call valuable collisions — those opportunities where people cross paths, spark or refresh relationships, exchange ideas and trigger business growth. These everyday experiences make up a vital currency that is unparalleled in other business districts across the city.
“Downtown is really experiencing change,” says Overall. “Traditionally, it was known as an office environment with some arts and cultural venues, but over the last decade we’ve seen a lot of exciting things develop. We’ve seen the addition of sports venues, like Minute Maid Park and Toyota Center. Now that so many multifamily residential units have been added to the market, Downtown is more of a 24-7 environment.”
Large-scale residential developments, such as the Finger Companies’ 400-unit building 500 Crawford (opened 2016), Woodbranch Investment Corp.’s 463-unit Market Square Tower (opened 2017), and Hines’ 274-unit Aris Market Square (opened in August 2017) continue to grow Downtown’s residential population by leaps and bounds.
“There was a time when Downtown was a place where people went to work and left at the end of the day,” says Brinsden. “And today, Downtown is so much more vibrant. We’ve seen the whole environment shift, especially with more people walking from place to place.”
This pedestrian sidewalk culture will continue to grow as more retail, restaurants, entertainment and engaging first-floor design for commercial buildings spreads across Downtown.
Desirable Downtown Landscape
“Downtown is definitely the center of innovation in workplace design,” says Mooz. “It is the repository of a great deal of the intellectual and financial capital in our city. We remain convinced that a strong Downtown creates and sustains a strong city.”
Mooz also points to the continued commercial real estate investment in Downtown, with construction cranes remaining active in spite of recent economic climate.
“The Houston economy has been challenged, so landlords need to be more creative,” says Overall. “The commercial real estate market in Houston is in the early innings of addressing the workplace offerings for younger generations and those to come. Developers have to adapt to change with the times to offer the variety of amenities and flexible spaces that those workers need.”
Vibrancy in and around the workplace motivates employees to actually be excited about coming back into work. Indoor and outdoor gathering spaces that host public events and programs provide vital threads that connect the seemingly faceless, anonymous urban population and give a sense of community.
“For projects to be sustainable long-term, there must be an authentic community both inside the office building and out in the surrounding district,” says Mooz. “There’s not a more authentic community for an office building than Downtown Houston.”
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