The office rental market is softening. Tenants may have been willing to accept a limited amount of defects in exchange for a fair price, but as choices increase, the demand for well fitted out office rentals is expected to rise. The curve showed an upward trend in rents in southeast Florida from June 2021 to June 2022, to the extent of 28% year on year, according to The Palm Beach Post. Next June, the annual increase is expected to be 18%, showing a clear indication that the price hike is losing steam.
The Middle Ground
Florida’s landlords have become accustomed to higher asking prices, particularly in the Palm Beach, Broward, and Miami-Dade districts, which Florida Realtors recently argued were overvalued. The slowing of the market may come with a sensation of a burst bubble for landlords, but a fairly priced market — the one we are expecting to see in the coming months — opens up a lot of opportunities for tenants, landlords, and brokers alike.
Those that can foresee market trends are better prepared for quick occupancy. As prices for tenants become more affordable, the shift from a landlord’s market to a renter’s market comes ever more apparent. This is where a nimble and creative mind will greatly benefit those landlords, as well as the brokers who include their properties in their portfolios.
So if tenants have more choices, the trick is to make the decision easy for them. The most versatile office spaces will trump those that have been left vacant and crumbling through pandemic absenteeism. The Great Return requires landlords to upgrade their offices, which is why AEI Spaces has researched the design trends that will affect renters’ decisions as we transition toward the end of 2022.
Reformatting the layout to one that not only suits the post-pandemic era, but also takes into account workers’ newly acquired preferences is key. Flexible working, where teams can attack their to-do lists in a way that they want, requires different areas to suit different tasks.
Quiet areas, collaborative spaces, and separate areas for meetings all spring to mind automatically — but lesser perused format factors can include keeping workspaces away from high-traffic areas, sufficient cabinetry to aid tidiness and reduce visual distractions, and comfortable seating areas that emulate the work-from-home flexibility to which workers have become accustomed.
- Modular Offices
Starting with the stark advantages, modular office spaces provide a quick route to privacy in open offices, they are 70% faster to put together than permanent constructions, cheaper, and offer further advantages in terms of flexibility, as they can be disassembled and reassembled, meaning they can evolve with the office dynamics and needs.
Modular office spaces, including cubicles that can serve as meeting rooms, can come with all the bells and whistles of a general construction project, with electricity supply, soundproofing, HVAC options, and an array of lighting. For brokers advising their landlord clients, modular office spaces can pose a quick, cheap, and effective solution for conditioning an office for the new market, leading to quicker occupancy at a fair price.
While the needs and wants of the labor market show fluctuations, one thing is constant: sustainability remains high on the agenda for the talent pool. Sustainable offices are where workers want to be, which means they’re where companies want to set up. Naturally, this means landlords should not only provide this, but highlight it.
Check furnishings for manufacturer sustainability certification, efficient lighting which is natural where possible, and low-VOC paints and finishings. One thing brokers and landlords can do is document this process, so that the office’s sustainability can be proven, rather than just feature on the brochure as a marketing buzzword.
- Mental Health
The pandemic brought it into the limelight; workers are now demanding it. Caring for workers’ mental health can come in many forms, not limited to policies and procedures. Our environments play a central role in how we feel, and when workers will be spending more and more time back in the office, landlords have to think about how the environments they offer will have an effect on workers’ mental health. After all, happy employees mean a healthy company, leading to the longevity of the rental agreement.
Biophilia is a recurring theme in mental health, as are spaces that are not strictly dedicated to the daily slog. Workers need adequate space for downtime during work hours, which could mean dedicated areas for eating away from desks, areas that provide the opportunity for socialization, and some in which employees can simply take a break where the contrast in environment is sufficient to help employees switch off mentally.
Crisis Creates Opportunity
It can seem counterintuitive to make heavy investments in reconditioning a property when market declines are on the cards. But as prices drop, the amount of choice for tenants increases, which is why improvements can stand landlords in good stead to maintain their asking prices, or at least have the upper hand over those who choose to do nothing.
In summary, design flexibility provides workers with the resilience they need to complete tasks effectively, increasing the longevity of businesses that choose to operate in the South Florida area. Heavy construction projects are not a necessity, as modular options can provide a cost and time-effective alternative. Sustainability is still central to business success, and a focus on mental health continues to mark its territory in the professional world.
Even with a crisis forecast for the coming months, uncertainty doesn’t have to sow fear. As we know from recent years, disruption requires people to think and act differently if they are to overcome adversity. Crisis creates opportunity — the question is, how are you going to seize it? Reconditioning your office is a good place to start.