Kimball Sales Climb 21% / HAY Expands Wholesale Business in North America / Office Occupancy Hits New Milestone As Employers Regain Leverage / DIRTT Announces Leadership Changes / Kastle's Return-To-Office Barometer Tops 50% for First Time / Miami Has Become The Coworking Capital Of The World / Tech Leasing Plummeted 57 Percent in Fourth Quarter / Emotion’s Leading Role in Designing Positive Workplace Interiors / Navigating The Complexity Of The Hybrid Workplace Design Process / What Office Collaboration Will Look Like in 2025 


The Working Space
Monday, February 6, 2023

Industry News

Kimball International, Inc. last week announced results for the second quarter ended December 31, 2022.
 
Consolidated net sales increased 21% to $183 million from the year ago quarter, driven by growth in all three of the company’s end markets. Gross margin expanded 550 basis points year-over-year to 36.2%, due to continued price benefits amid moderating inflation and the easing of supply chain disruptions as well as benefits from LIFO accounting impacts. Net loss was $36.1 million, or $(0.99) per diluted share, inclusive of a $36.7 million after-tax non-cash goodwill impairment charge associated with the Poppin acquisition. Adjusted net income was $3.0 million, or $0.08 per diluted share, compared to adjusted net loss of $(5.7) million, or $(0.16) per diluted share in the second quarter of fiscal 2022. Adjusted EBITDA was $16.0 million compared to $4.0 million in the year ago quarter. Adjusted EBITDA margin was 8.8%, up from 2.7% in the year ago quarter.
 
“While upstream activity remains strong, we experienced a decline in orders rates in Workplace and Health during November and early December due to delayed decisions from clients in the face of recessionary concerns and after cycling significant year-over-year growth comps. However, our order rates improved through the month of January, giving us confidence the softening demand was temporary," said CEO Kristie Juster.
While there has been a slight decrease in Bookings, growth in that area is forecasted to start trending up again over the next two quarters. Billings and Pipeline activity grew significantly. Backlogs are coming off highest point pre-and post-pandemic.

Key Findings This Quarter

• The current survey has captured a 2.8% decrease in Q4'22 bookings over Q3'22, worse than the expected 2.5% increase previously forecasted. This suggests some demand has softened or been delayed in Q4.

• Dealers forecast bookings growth increasing 3.7% in Q1'23 over Q4'22 and an increase of 1.2% in Q2 of 2023 over forecasted Q1'23 levels.

• Billings grew significantly, with the index increasing from 65.6 to 69.7. This would indicate that dealers continue to employ best practices in invoicing, delivery, and installation, effectively reducing the backlog and increasing invoicing.

• The backlog index is at 97.8 compared to 99.7 in the Q3'22 results, bringing it down off the highest point in the last three years, pre- and post-pandemic. This would signal a slight improvement in supply chains, lead times, and a possible improvement in construction delays.

• There is a significant increase in pipeline activity in all regions, and all sectors except for tech companies, and all product categories, except for technology/AV, likely due to an ongoing desire to create extraordinary environments that encourage a return to the office.

Solomon Coyle’s managing principal Paul Holland states, “We see good news in the 2022-Q4 Market Outlook Report, with little to be concerned about in the data. Dealer invoicing lifted as backlogs have started to come down off their peak. Booking softened slightly but is forecasted to increase again in Q1 and Q2 this year. Additionally, Pipeline Activity lifted in all regions, most sectors, and most products indicating continuing demand for dealer products and services despite ambiguous economic news.”

John Joseph, head of business analytics for Solomon Coyle, adds, “For the second consecutive quarter, healthcare, education, and government – three sectors that may respond relatively slowly to softening demand – are showing the highest pipeline growth. Given the overall strength we’re seeing, however, we caution against looking too much into this particular signal. For now, it’s something we will continue keeping an eye on.”

HAY Expands Wholesale Business in North America
Now available through Nordstrom, customers can shop the beloved HAY brand both online at Nordstrom.com and directly from the curated HAY branded space in the NYC Nordstrom Home Store.
 
This expansion of HAY wholesale in the US builds upon the brand’s wholesale business in Europe and the existing HAY offering at the MoMA Design Store in New York City.
 
As part of the MillerKnoll collective’s global retail business, customers can also shop HAY brand and more at brick-and-mortar Design Within Reach studios across the US and at us.hay.com.

DIRTT Announces Leadership Changes

DIRTT announced the departure of Jeff Dopheide as the company’s Chief Revenue Officer.

Benjamin Urban, CEO, commented, “On behalf of the Board of Directors and everyone at DIRTT, I’d like to thank Mr. Dopheide for his contributions to the company and wish him all the best. We remain committed to building an agile and integrated company, best positioned for sustainable growth and financial performance. We’re grateful to our clients, partners, and employees for their ongoing dedication to the DIRTT vision.”

Mr. Urban will oversee the company’s commercial function as part of his role as CEO. He brings extensive interior construction and business development experience with him from his previous role at one of DIRTT’s largest Construction Partners. There, he helped grow and diversify the business, expand into new market areas, develop strategic distribution partnerships, and deliver innovative interiors for large global clients.

As corporate layoffs continue to make headlines, especially in the tech industry, workers are coming back to the office in greater numbers than at any point since the pandemic hit nearly three years ago.

Over half of office workers reported back to the office in January.

For the first time, the occupancy of offices in the 10 biggest U.S. cities eclipsed 50% of their pre-pandemic average for the week ending Jan. 25, according to building access technology firm Kastle Systems. All 10 cities tracked by Kastle reached occupancy rates over 40%, another first since March 2020.

Office has been a spiraling disappointment since so many companies were compelled to close early in the pandemic and hybrid work became a broad fact of business and life.

Vacancies in the property type at the end of last year — just a month ago — were worse than during the pandemic’s height, according to Moody’s Analytics.

The owner of Chicago's Merchandise Mart and one of New York City's largest owners of commercial real estate estimates the value of some of its properties has dropped by more than half a billion dollars.

Vornado Realty Trust disclosed in a regulatory filing Tuesday night that it expects to take a $600M impairment charge on its portfolio, $480M of which is related to its ownership stake in a large portfolio of Times Square and Fifth Avenue retail properties.

In a week when green shoots of hope are breaking out all over the place comes news that for the first time since the lockdowns of the pandemic, Kastle’s weekly 10-city return-to-office barometer has reported an average office occupancy level of more than 50%.

The 10 major US metros in Kastle’s survey—based on entry-card swipes—averaged 50.4% in office occupancy levels for the week ended Jan. 25 (Kastle’s week runs from Wednesday to Wednesday, which is the day the work week most often ends in the emerging patterns of the post-pandemic hybrid workplace).

A number of factors contributed to a sharp drop-off in tech companies leasing space in the fourth quarter of 2022. As layoffs in the sector multiplied, venture capital funding halted and companies began to rethink their office footprints, according to a report from Savills. In the fourth quarter of last year, tech leasing fell 57 percent from the previous quarter, with just 2.2 million square feet leased. Tech leasing has been one of the strongest sectors in the office market, with tech industry companies leasing more office space than any other industry since 2010, according to CBRE.
Microsoft has halted plans to develop a sprawling campus on a large piece of land it bought on the west side of Atlanta. Microsoft bought 90 acres in Atlanta's Grove Park neighborhood for the development of a future campus, which would include affordable housing alongside new offices.
Last fall, amid a chaotic time of tech layoffs, slumping office space demand, and continued interest rate hikes, data emerged that office occupiers were looking at shorter lease terms. It wasn’t an entirely new trend since the early days of the pandemic, the big question surrounding the future of the office was already leading many in the industry to think about scaling back lease terms. But nearly three years after the early days of the global health crisis, with average office occupancy still significantly lower and a looming recession, office occupiers—especially larger corporate users—are looking to mitigate risks with shorter leases and more flex space.
Cold comfort for those up North. Miami has emerged as the top coworking and flexible office market in the country, soaking up waves of corporate transplants looking for a quick foothold in buzzy South Florida.

"You have companies that are calling us that are saying, 'Hey, I'm not there now, but I know I want to expand in Miami, can I get an office?'" said Melissa Bessler, Industrious' regional director of the Southeast-Midwest region. "And they’re signing without even seeing a location."

Features

Joseph Press, co-author of Office Shock, talks about the officeverse, working with an agile mindset versus desks on wheels, and why return-to-office policies often don't work.
"I have more respect for the fellow with a single idea who gets there than for the fellow with a thousand ideas who does nothing." -Thomas Edison Our job is to help you look up from the urgent busy-ness and take note of the vital actions to move your business forward.

Workspace News

Employees at Capital One's global headquarters campus in McLean, Va., can step away from their desks, take a stroll over to the building's skypark, called The Perch, and enjoy a friendly round at Perch Putt, an 18-hole mini golf course, and they can do it with a cocktail in hand if they so desire.
Nuveen has announced that New York-based co-working flex space provider Industrious will run the shared space—including amenities, conference and event space as well as lobbies—in Nuveen’s 64 office buildings, offering a branded “tenant experience” across the portfolio.

Industrious will offer an experience built around suite of amenities that create a “hotel, hospitality vibe” at workplaces, the flex co-working provider’s first attempt to create a branded offering of this sort across an entire office portfolio.

People's workplace experience in the wake of recent economic upheavals is to be investigated as part of a major new survey led by Cardiff University and funded mainly by the Economic and Social Research Council (ESRC).
The British Safety Council has warned that new legally binding air quality targets for the UK, which passed the final stages of parliamentary scrutiny earlier this week, fall well short of what is needed to keep people safe.
News of The Line being built in Saudi Arabia has generated quite the buzz.

This city-sized building is meant to provide nearly everything humans could need, including places to live, work, be entertained, and be taken care of when sick.

The Line is meant to accommodate 9 million people, be more than 100 miles long, and 1,650 feet high. Future residents will have access to all essential facilities within a five-minute walk, as well as access to a high-speed rail (with a 20-minute end-to-end trip). The project says it will create 380,000 jobs by 2030.

Design

NELSON Worldwide's Haril Pandya explores the importance of selfless collaboration in A&D to continue to elevate our industry. Why is great design so critical? And for that matter, what is "great design"? Who determines if the design is great? Is there a jury? Is it just simply public opinion?
Momentous shifts in work culture have translated to major changes in workplace design. With many updates still underway, this transitional period provides us with the opportunity to reconsider how the workplace can be made to work better for employees and organizations.
Gensler's Amie Keener shares some helpful tips to create a happy, healthy workspace that supports all people and workstyles. Do you want your workspace to be happy, healthy to attractive high performing workers? Consider incorporating more robust inclusive design features into your built environment.
For generations of office workers, starting in the post-war 1950s and through the early 2000s, the location, size, and features of ones’ office communicated rank and thus organizational and social status. In that era, every employee was assigned a workspace which was essentially “owned” by that person. Thus, the individual workspace was closely identified with the person, reflecting their position within the organization, much in the way the selection of an automobile can serve to reflect status.
Stantec's Michelle Reyman explores how to manage the variety of specialists we rely on to develop a cohesive hybrid workplace experience. Workplace design has become increasingly complex, and the pandemic significantly accelerated the technology-assisted evolution of the workplace.
Fernanda Ruelas of Legeard Studio shares some human-focused design tips and ideas for creating a positive workplace experience. Achieving a work-life balance has increased in difficulty over the last three years. Remote work has arguably drawn a line down the middle of the two, causing many workers to identify as only having a work life and a home life. This mindset portrays the “office”— in person or two feet from the bedroom — as the draining part of their day, where the negative energy continues to seep into non-work hours.

Trends

The federal government is the largest office tenant in the U.S., leasing more than 180M SF from private landlords. The future of that portfolio could be determined inside a new 25K SF facility in downtown D.C.
Companies continue to focus on the work office experience, which has evolved in the past two years to focus considerably on collaboration, according to a recent HqO report.

The report’s forecasts extended out several years and said that by 2025, corporate workspace allocation will flip from 70% individual workstations and 30% collaborative space to 30% individual and 70% collaborative space.

Latest Products

Clear Design has released a new line of modular lounge seating, KOLAB. This new addition to its 5-day FAST Program offers a sleek two-tone seating option available in four modular pieces: single seat, double seat, corner, and ottoman.
Furniture that will last for generations: These handsome Za stools, designed by Naoto Fukasawa for Emeco, are handmade in the U.S. Made from recycled aluminum (which can of course be recycled itself), the stools come in three heights. Finishes include hand-brushed and clear anodized, powder-coated in a choice of six colors, and a stunning (and stunningly expensive) hand-polished version that is also clear-anodized.
Float has the distinction of being the only product designed by the late Alan Heller, founder of the brand. The tables, which were originally introduced in 2014, are being reissued and will be available exclusively in white, which highlights and elevates their minimalist shape.
Interweaving the qualities of the Earth’s textures and the patterns created by humans throughout their lifetimes, Luum Textiles combines elements of art, anthropology, and geology within its newest collection launch, Earthly Artifacts.
3form proudly presents their 2023 Color Collection: a palette of soft, muted hues that come alive with natural light. Drawing inspiration from the four seasons and the emotions they evoke, this palette explores the subtle side of 3formʼs expansive color system with 10 new pastel tones.
Konstantin Grcic teamed up with Vitra to develop the Locker Box and Locker Box small: two compact, portable caddies of different size that can hold work tools, such as a laptop, keyboard, papers, pens, cables, hard drives, headphones etc. and be easily stored away at the end of the day.
About fifteen years ago, Leland introduced Slam-a versatile chair with a variety of frames, shells, and finishes in a specific range of colors. Recently, in partnership with Altherr Désile Park, and in response to the way the world has shifted since releasing the original design, Leland has updated both Slam’s colors and materials.
Loftwall launched Arbor, a new wood acoustic wall covering for commercial interiors that combines natural wood elements with dependable acoustic technology. Designed with biophilic principles in mind, Arbor not only enhances the aesthetic appeal of any space, but also prioritizes the well-being and productivity of those who use it.
Hem launched its inaugural outdoor dining furniture: the Chop collection. Designed by London-based industrial designer Philippe Malouin, a frequent collaborator, Chop puts an emphasis on creating high quality, uniquely design furniture for the home – just like the rest of the brand’s catalogue. The brief given to Malouin’s asked for a new standard in outdoor furniture, a modern classic.

Latest Product Videos

At the center of this is the classic whiteboard, which actually functions as the linchpin of a lively round of talks, and with boards completely gets rid of its inflexible location-bound nature: it can be picked up vertically or horizontally by all the furniture in the collection and repositioned with just a few flicks of the wrist.

Maker Interviews

Roberto Monti has taken over the role of CEO for Arper at the beginning of 2022 and since then has brought in a lot of dynamism. In this interview, he tells us in which direction he would like to lead the company and what significance sustainability has for him in this context.

Other News

Unsure if manufacturers should enter this category and offer it as an office amenity, but Irish designer Domhnall Nolan has created the Play Pieces range of modular sex furniture that takes cues from retro gym equipment and aims to be gender-inclusive. The range contains two items of furniture as well as a detachable cage wall. Hopefully they'll be exhibiting at NeoCon.
Offices have been offering more and more amenities for years, competing with one another in a no-holds-barred battle to lure employees out of their homes and into ever-glitzier workspaces. But one real estate firm believes it has struck on something that will really get high-earning users' motors running: Houstonians now have the option to rent permanent and coworking office space with a view of their luxury supercars. Yes, really.
The creative genius of midcentury designers Ray and Charles Eames is apparently timeless. No matter the year, or the current cultural zeitgeist, their designs have a way of feeling relevant. The latest example is a collaboration between the Eames Office and Australian skateboard manufacturer Globe, in the form of new decks printed with iconic Eames designs.

Trends in Commercial Projects from Around the Globe

Built in 1939, a former postal sorting centre in The Hague has been turned into a headquarters for the Dutch national mail service through socially minded, sustainable interventions.
With a variety of work zones, the comforts of home, and decentralised amenities that take advantage of the surrounding area to create community, dMFK is defining a new vision for flexible workspaces.
Graham Baba Architects updated a Seattle-based wellness company's offices to satisfy their current space needs while also future proofing to accommodate growth. 

Project Case Studies

Prior to the pandemic, Moderna was a Massachusetts-based company of fewer than 800 people. After being called upon to fight the global scourge, nearly two years later they're home to approximately 3,900 employees with operations in 17 countries.

Podcasts

Office buildings are not known for generating brand identity or customer loyalty, certainly not in the way that hotels, gyms and airlines aim to. But that may have to change, according to Industrious CEO Jamie Hodari.

Upcoming Industry Events

NeoCon 2023
June  12-14, 2023 | Chicago, IL
 
NeoCon has served as the world’s leading platform and most important event of the year for the commercial design industry since 1969. A launch pad for innovation—NeoCon offers ideas and introductions that shape the built environment today and into the future.  

Milan Design Week 2023
April 18-23, 2023 | Milan, Italy

Milan design week is the biggest annual design event in the world and takes place from 17 to 23 April 2023. The week includes the furniture fair Salone del Mobile, which takes place at the Fiera Milano exhibition centre and is the largest event to take place during the week. The selection of fringe events collectively named Fuorisalone also takes place across the city.

hd expo+conference
May 2-4, 2023 | Mandalay Bay, Las Vegas

HD Expo + Conference is the largest hospitality event of its kind in the country, showcasing the latest products, services, and innovative developments from the industry’s leading manufacturers.  

Clerkenwell Design Week 2023
May 23-25, 2023 | London

Clerkenwell is home to more creative businesses and architects per square mile than anywhere else on the planet, making it truly one of the most important design hubs in the world. To celebrate this rich and diverse community, Clerkenwell Design Week has created a showcase of leading UK and international brands and companies presented in a series of showroom events, exhibitions and special installations that take place across the area.

Orgatec 2024
October 22-26, 2024 | Cologne, Germany

Orgatec is the International trade fair for office and property equipment. Held in Cologne, Germany.
Find the best Contract Furniture Industry jobs and hire the best talent.
Dear Stephen, I'm a sales rep for a manufacturer. I've been working here for five years. Our regional manager recently took another job, and there was an opening to replace him. I applied for the job but was told I lacked leadership experience. No direct reports.
When you feel connected to your work, you feel more engaged. At Haworth, you can pursue a career that offers you ample opportunity to build your portfolio and expand your skillset in an exciting and inclusive environment. Join a company that values innovation, inspiration, and you!
As a world leader in the manufacturing of height adjustable bases and desks Conset America is looking for independent representatives or an independent representative group covering the following states: Utah, Colorado, Arizona, New Mexico, Arkansas, Mississippi, Missouri, Kansas, Nebraska, Iowa,...
CWC is based out of Atlanta, GA and we are celebrating our 94 th year as a premier office furniture dealership! We offer either a local in-office workspace or 100% remote work for non-Georgia residents. CWC Provides: Competitive Pay Excellent Health Benefits We are an Employee Stock Ownership Plan...
Indoff is expanding and in need of experienced outside sales professionals in your area. Indoff Offers: 50% commission on the gross profit - This is a straight commission position, and right now Indoff offers 70% commission for your first year with us.
TGEG Seating a Southern California based seating company is searching for independent sales representation. The territories available currently are Nevada, Northern California, and Arizona.
Global Furniture Group, a leader in the workplace, education, healthcare + hospitality furniture industry has an immediate career opportunity for a Territory Manager for Richmond, VA. This candidate will increase awareness and interest among dealers, designers and end-users of Global’s brand, product and capabilities. 
Barbican Architectural Products enters it's 35th year of business looking to find the right partners for it's Architectural Wall Division. Organizations should provide an established network of Architects, Interior Designers, General contractors and end users. Due to the overwhelming response and the utilization of our Architectural Walls, we need solid business partnerships to support the growing demand.
NDI Office Furniture LLC, one of the nation’s largest stocking office furniture importers and distributors, is seeking an individual or group for Sales Representation in the South Florida territory. NDI is based in Nashville TN with warehouses in FL, AL and TX. We utilize our own fleet of trucks and drivers to provide industry-leading service to our customers.  The successful candidate may be either an employee or an Independent Representative.
WIELAND is a leading provider of patient room and seating products to healthcare facilities across the country. We are seeking a sales professional to represent our healthcare products Washington, Oregon, Montana, Idaho and Alaska. Our continued growth provides significant income potential for the right individual. This is an employee position with full benefits. 
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