WASHINGTON, D.C. – January 7, 2014 – (RealEstateRama) — Sales of office space, an essential fixture of the modern real estate company, are not necessarily dropping. However, they are shrinking, as customers are requesting smaller offices for their businesses.
Let’s start with some facts. Sales of business office space are still high, especially as businesses elect to move out of suburbs and office parks and relocate in city areas. To quote a recent Wall Street Journal article, businesses are making these moves in order to be closer to the most talented workers: “the young, educated, and hyper-connected workers who will lead their businesses into the digital age.”
However, just because businesses are moving into the city doesn’t mean they plan to maintain the same footprint that they might have left in a suburban office park. The Global 100 law firm Nixon Peabody, for example, recently moved from an older, larger city office into a new, smaller, office space in downtown Washington, D.C. Their move places them in the center of the action, near DC’s thriving Chinatown neighborhood as well as the government-friendly Archives and Judiciary Square areas, but it is a deliberate downsize: they are cutting office space for their administrative assistants and office services, as well as their sizable law library.
To quote Nixon Peabody D.C. managing partner Jeff Lesk, in a recent ABA Journal article about the law firm’s move: this is “a realistic reset in what’s appropriate real estate spend for a top notch law firm. The traditional square footage is not necessary to do a great job serving clients and providing a great workspace.”
These moves to smaller spaces should be viewed as opportunities among realtors working to serve businesses. Even if businesses are moving into smaller spaces, they are still making the decision to move, which presents an opportunity for any business realtor with a large presence in a major city. Take Washington, D.C. for example. Frank Haney and his FLH Company have an enormous presence in the D.C. metro area, including more than 1 million square feet of office space in the Portals Office Complex.
The building at 799 Ninth Street NW, to which Nixon Peabody moved this month, is likewise held by a large real estate company, in this case Brookfield Office Properties. Businesses wanting to move to offices in D.C. will be well served, regardless of the office size.
If your company controls real estate properties for businesses, especially in large cities, it is time to start preparing for these types of moves. You are going to want to sell these businesses on features such as multi-use space, like the break room that converts to a conference room, or the library that doubles as a reception area. You are also going to want to sell features designed to attract young, mobile workers, such as proximity to a metro or light rail station, or a building that allows workers to bring pets into the office.
Whatever you do, don’t present these office moves as an unfortunate downshifting. As Nixon Peabody and other businesses note, this is actually an opportunity. Businesses are choosing to consolidate space and move into the hottest neighborhoods in the city, and it is your job to guide them to the best properties to meet their needs.