Matt Levin, an Entrepreneurs' Organization (EO) member from Austin, is the Managing Broker & Principal of Equitable Commercial Realty, a full service commercial real estate leasing, sales and management firm. We asked Matt about some of the advantages and disadvantages of having a creative office space for your company. Here's what he had to say.
Why is there a trend for many businesses to locate to a more creative office environment? The answer to this question is to provide the best atmosphere possible for their business to thrive. Usually this decision is driven by the need to recruit and retain top talent. As an office leasing broker active in the downtown Austin market, I have seen firsthand the movement for businesses to relocate to creative office space. Here are some of the benefits in doing so, as well as cautionary things to be aware of.
What are some advantages?
Buildings that offer original brick walls, high ceilings with exposed mechanical equipment, a more open floor plan, and other unique features are in heavy demand. Further, there is much more attention given to the materials used throughout the space, such as reclaimed wood within reception or conference areas, higher-quality flooring, high-end kitchen finishes and appliances, as well as bright colors.
Many of the industries seeking creative office space are in the technology, software and internet markets. As the talent pool for quality employees for these areas is quite competitive, many companies in these industries are seeking to craft a more interesting and fun place to work for recruitment and retention purposes.
For example, many are offering large kitchen areas (often times with chefs that prepare meals), game rooms resembling a miniature Dave & Buster's and break-out areas with comfortable chairs and sofas to work from, like those within hotel lounges. Access to outdoor spaces is also viewed as a substantial amenity. It is important to note that while the previously mentioned industries have been the initial driving force behind this movement, many other businesses are making a move to a more collaborative and creative workplace. In fact, we have even worked with law firms who are often times viewed as the most traditional office users in this regard.
What should you look out for?
As companies are considering their next home and reviewing the various opportunities available, why not choose a more creative atmosphere? There may be cost disadvantages associated with higher rent and increased construction expenses to obtain the desired end result. For example, it is not unusual for companies to need to invest substantial amounts of their own funds above the construction allowances provided by landlords to achieve an artistic end-product.
Also, as demand for this product type which is most often located in more urban cores is high, the resulting rental rates will tend to lead the market. Many companies will work to offset these increased construction costs and higher rents with a more dense work environment that provides plentiful areas to break out. It is not unusual to see plans for these type tenants provide for accommodating seven or more people per every 1,000 square feet of office space leased. Using simple math, an example of a 10,000 square foot, open plan could provide space for over 70 people.
One important question to consider: If you calculate the amount of time spent in your office, would it be worthwhile to invest in a work space to produce a more inspiring environment for your people to enjoy?