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CEOs Weigh in on ‘Office of the Future’ at NAIOP New Jersey Industry Insights Event
Technology, Amenities and Space Utilization Top List of Issues Shaping Development and Investment Decisions

JERSEY CITY, N.J., Oct. 5, 2018 – CRE leaders shared their perspectives on key issues that will impact the “office of the future” during NAIOP New Jersey’s annual CEO Perspective. The interactive discussion, part of the commercial real estate development association’s Industry Insights series, took place at Maritime Parc in Jersey City.

Discussion leader Paul Teti, partner with Normandy Real Estate Partners, was joined by panel members: Neil Grassie, global head of Capital Projects and head of Corporate Real Estate Solutions with Americas at Barclays; Jan-Hein Lakeman, executive managing director USA at EDGE Technologies; and Steve Nislick, chief financial officer with Hugo Neu Corporation. The executives exchanged opinions and insights on issues ranging from repositioning spaces to attract the younger workforce to how technology and space utilization are influencing investment decisions.

Flexibility, Diverse Employment Pool, Strong Transportation Links Influence Site Selection

Teti invited comment on what elements are non-negotiable when it comes to developing an office project. “Regardless of whether it’s in Whippany, Glasgow or India, we are looking for a diverse employment pool in terms of age and skill set,” said Grassie. “We also want an employment pipeline of schools and universities to help us fill a full range of positions, and strong transportation links that we can supplement with our own shuttle service.”

Nislick, whose firm’s 130-acre Kearny Point project is repurposing buildings in a former shipyard into office and industrial spaces, said, “The office of the future has already been defined by Millennials and the companies looking to attract them. To create a modern workplace for a diverse business community, the first thing we look for is location. If it’s not in an urban environment, it’s a non-starter.”

Nislick said space flexibility also is critical. “At Kearny Point, office spaces range from 35 to 10,000 square feet and we’re providing a turnkey solution that includes IT, conference rooms and short-term leases. If you look at companies like WeWork, leasing space on a short term basis and taking the risk is where the market is headed.

Creating Amenity-Rich Environments is Not Just About ‘Checking the Box’

While the panelists agreed on the continued importance of providing office tenants with an amenity-rich environment, Teti noted it is no longer enough to take a “check the box” approach. “We’re programming spaces to ensure that amenities are customized to the specific user and controlling the environment at all times so it remains active and vibrant.”

Lakeman noted, “Many office buildings were constructed for jobs that existed 40 years ago, which is why 85 percent of workers in conventional buildings are not engaged. Today we need to design our buildings and amenities around the user in order to attract a highly skilled workforce.”

Nislick agreed. “Having a diverse tenant mix that thrives on interaction with other businesses is extremely important to us. To create this sense of community, we must be willing to spend money on things like the right food service, liquor licenses and events that appeal to our tenants as well as outsiders.”

Noting that “our biggest amenity is free parking,” Nislick cautioned developers about including building amenities people say they want, but do not use. “If you have a gym, make sure people can shower. If you have a yoga room, include an instructor and classes. Despite the cost, you need to offer quality options and incentives for tenants to use them.”

Grassie cited continued global demand for services that give employees a greater sense of well being. “Our workforce wants a better work/life balance, so we are investing in child care and fitness centers as part of our fundamental infrastructure.” Asked if Barclays was seeing a return on its investment, he replied, “We’re taking a leap of faith that if we offer staff the right amenities it will increase engagement. We’re still in the honeymoon period, but it’s certainly been a slam dunk when it comes to attracting talent.”

A Shifting Focus Towards Human Sustainability

The panelists were united in their view of the office of the future as healthy, sustainable and technologically advanced. “The world needs better buildings, and we can do something about it,” said Lakeman, whose real estate technology firm specializes in using big data analytics, smart technology and smart systems to reinvent the workplace. “People in the industry have this notion that a better building must cost more. Smart technology enables businesses to offset their investment by quantifying and monetizing what’s going on in their buildings and utilizing energy and space more efficiently.”

The growing emphasis on human sustainability is leading developers to place more emphasis on meeting the WELL Building Standard than on becoming LEED certified.

“We’re moving away from LEED because WELL is directed more to the user and their well being than to the performance of the building,” said Grassie. “With the push to increase density and accommodate more people in less space at a lower cost, it’s essential to provide a healthy environment they want to work in.”

Nislick added, “The importance of WELL certification starts with the people you serve. Sustainability matters to today’s workforce, but ensuring that people leave the building feeling better than when they arrived is just as critical as reducing your carbon footprint.”

“We average nine hours a day sitting in our offices, and this is biologically unhealthy,” said Lakeman. “As a developer, we focus on health. We can provide climatized air and natural light, and create opportunities to increase engagement with elements like atriums, internal staircases, parking facilities that promote walking and even narrow corridors where people may literally bump into each other.”

Increased Cooperation from Municipalities

There was a general consensus among the panelists that when it comes to working cooperatively with municipalities, things are moving in a positive direction. “Kearny was once a huge employer base,” said Nislick. “One of our goals is to bring jobs back, and local officials appreciate this. We’ve worked closely with them to develop infrastructure and they have been instrumental in helping us with tax incentives and PILOTs.”

Grassie noted, “We’re a large employer, we want to invest in schools and it’s our goal to be part of a thriving community. Municipalities have more professionals who are far more informed about how we can support them. People want to be part of a ‘bigger thing’ and  when our interests are aligned we can do impactful things.”

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Photo caption: Pictured (from l-r) are Jan-Hein Lakeman, EDGE Technologies; Steve Nislick, Hugo Neu Corporation; Neil Grassie, Barclays; and NAIOP NJ CEO Michael McGuinness.

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