Friday, September 2, 2022

Last month's Architecture Billings Index displayed signs of a softening demand for design services

Buildings Get Personal to Spur the Return to the Office

Herman Miller Reintroduces Iconic Eames Molded Plastic Chair, Now Made with 100% Recycled Plastic

News

While architecture firm billings grew for the 18th consecutive month in July, the pace of growth continued to slow. The Architecture Billings Index (ABI) score of 51.0 for the month is the lowest since January, and marks the fourth straight month with a lower score than the previous month. With a variety of economic storm clouds continuing to gather, we are likely looking at a period of slower growth going forward. In addition, inquiries into new projects also continued to slow this month, although the value of new design contracts rose slightly from June to July. While both of these indicators remain below their mid-2021 peaks, they show that there remains interest in new projects going forward.
Even as rents languish and vacancy rates remain high in much of the office market, the creme de la creme in commercial is still able to command top tier rents and has limited availability.

The Workplace

As many employees don’t want to return to the office, hybrid work looked like the perfect solution to save it — but is it working?
Three years on, the coronavirus pandemic is still having very real effects across a range of companies and industries.
Last Friday marked International Dog Day, making this the perfect time to explore the claim that having dogs, and, more generally, furry friends of all sorts, in the workplace can be good for business. Are pet friendly workplaces truly best in show? Let’s dig in and take a closer look.
RSP’s Kelsey Sullivan explains how designing for Gen Z can lift morale and work/life balance for workers of every generation.
What happens when three equity partners and a junior associate in a law firm walk into a conference room? They leave with a renewed appreciation for the office.

At least, that was the experience of Phil Appenzeller, CEO of Dallas-based firm Munsch Hardt Kopf & Harr. That moment, which was before his firm mandated a companywide return, crystallized why he feels in-person work is still critical for lawyers, even in the era of work-from-home.

JPMorgan’s boss has been quietly telling senior managers he expects the mega-bank’s rank and file to be in their seats at the office five days a week.

Trends

Remote work and the housing affordability crisis have combined to drive multifamily and office values apart and reduce the importance of being in the big city.
The best way for buildings to understand nuanced occupant behavior is with technology. Some of this tech already exists, from tenant experience apps to sensors that track occupancy. But the data they collect hasn’t been used to anticipate people’s preferences at scale yet.

Design

If amenities can’t lure corporate workers back to the office, it’s time to offer them something to do other than work at the office. Speaking of, why should all this square footage only benefit those who work 9-to-5 and probably don’t live in the same zip code as the building?

Flex Office

Let’s face it, the office hasn’t evolved much over the last 30 years. But a global pandemic certainly changed that. Faced with tenants seeking spaces that match their new working models, landlords are stepping up, offering office spaces that are designed, amenitized, and even leased in new ways.

Hybrid Working

The implications of hybrid working. Learn how hybrid working affects the workplace ecosystem.

Coworking

A women-only coworking operator, hobbled by the pandemic and marred by internal strife, is calling it quits.

The Wing — co-founded by Audrey Gelman and Lauren Kassan and billed as a safe workspace for women — said Tuesday that it would close its six remaining coworking locations after failing to achieve financial sustainability after the loss of members during the pandemic, The Wall Street Journal reports.

 Flexible office operators are enjoying their time in the limelight as corporations reconcile with their expensive office presence.

As these companies shift to more distributed operations, leaders are reevaluating their office space needs both in the context of preparing for an incoming recession and meeting the demands of employees.

According to a survey conducted by Yardi, 39% of occupiers are interested in or currently using coworking spaces. Considering just a few years ago coworking spaces made up just 2% of total U.S. office stock, the rise in demand is noteworthy.

Real Estate

Commercial real estate has always been an easy bet for investors. Performance is predictable, and a good commercial building’s low-risk profile can help diversify almost any investment portfolio. Values go up when times are good, and foreclosures are a last resort for banks when times get tough. Traditionally, the office is the most attractive asset class within commercial real estate as a whole, typically making up 30-40 percent of real estate assets in any given portfolio. But lately, the office hasn’t been a top performer.
Office leasing activity in Manhattan nearly doubled in July, surging to 3.16M SF from June’s total of 2.2M and almost 1M SF more than the activity recorded in July 2021, according to Colliers.

The overall July leasing activity in Manhattan was the strongest monthly leasing total since January 2020. Although the leasing velocity in Manhattan surpassed average monthly totals in each of the past two years, it was still 11.6% below the 2019 pre-pandemic average of 3.58M SF.

Office leasing picked up again in August across Manhattan, marking the best month since the onset of the pandemic.

Just over 3.4M SF was leased in the borough last month, up 8% over July — the previous pandemic-era high — and an almost 40% jump from August 2021, according to Colliers research.

July was not a good month for selected office demand in Chicago, Boston and New York City, according to VTS’ VODI analysis.

Even worse was activity generally in markets with concentrated finance, insurance, and real estate (FIRE) office use, which experienced the sharpest declines, according to the Index. Each of those four markets relies a great deal on those industries.

Demand for office space fell in July to its lowest since early 2021, at just over half of its pre-pandemic level, according to the latest VTS Office Demand Index. Chicago, Boston and New York City saw the largest declines during the month.
 
Nationally, a VTS index fell to 52 in July, representing a 17.5% month-over-month drop in demand.
Last week’s announcement of the biggest office deal of the year was welcome news for New York City’s office market, which has been battered by high availability and low occupancy.

Leases like KPMG's 15-year commitment in Manhattan West — the search for which kicked off in 2018, the company said — are a sign more large corporations are finally making decisions about how they want their offices to look long-term, and what it means for the size of their spaces, industry insiders told Bisnow this week.

Workplace Tech

Changes in workspace design through the use of virtual workspaces are on the horizon, but they depend on employees actually using them.
Going to work today should look a little something like this. The night before, you open an app to see which coworkers will also be in the office that day and to book the desk where you want to sit. In the morning, after tapping your badge in the lobby, you go and pick up your coffee order placed last night too. It’s ready and waiting for you. Once you’re at your desk, you remember to register the client you’re meeting as a visitor so that they can get into the building. You’re in luck – that the conference room with the best view is available for your meeting, so you book it.

Makers

One of the design industry’s most consequential partnerships began in 1991, in San Carlos, California, in the offices of a footwear brand called Sam & Libby Shoes. There, John Edelman toiled away in a company founded by his older brother Sam (“Libby” was Sam’s wife). One day, in walked another John—John McPhee. The two were the young guys in the office, and almost immediately they struck up a friendship.
Leading custom contract furniture manufacturer, Icon Modern, continues to grow its outside sales network by establishing a partnership with Chicago-based AK Design to expand its growth in the Midwest.

Dealers

Corporate Environments, a full-service furniture and interior architecture dealer has merged with Office Services, a leading office furniture and products dealer in Savannah, GA, to serve clients across southeast Georgia and throughout North America. Corporate Environments will expand its capacity to develop customized interior solutions with the help of Office Services sales and installation teams, office, and showroom space.

Products

Hushoffice pods let you create flexible, independent spaces for solo focus work, calls and video conferences, or team meetings and collaboration—without construction.
New Materials and Color Options Mark a Sustainable Milestone for Ray and Charles Eames’ Mid-Century Staple.
The Burch Design Studio introduces Batik, Ikat, and Patchwork; a trio of textiles honoring classic textiles in a contemporary way.

Projects

Louis Vuitton’s in-house architects designed its latest workshop, which consumes half as much energy as its other factories.
Financial 360 tapped //3877 for a progressive Rockville, MD office space that encourages interaction and community.

Last Word

An analysis of survey data on 1,694 parents of young children found that working from home can result in a “traditional division of housework and childcare”, with men fearing they may lose their masculinity when taking on more routine tasks.
PLAYHOUSE is a DIY design game that lets players drag-and-drop furniture and décor into spaces to create original looks for rooms.
Find the best Contract Furniture Industry jobs and hire the best talent.
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