Stylex Acquired by European Giant Flokk in a Contract Furniture Industry Shake-Up / US employers add surprisingly strong 216,000 jobs in sign of economic strength / Record-High Concessions Are Stifling Office Rent Growth / LA Office Availability Hits Record High To Finish 2023 / Manhattan Office Market Closes Sour 2023 On High Note / Houston Office Leasing Declined 35% Last Quarter As Tenants Vet Landlord Finances / $117B In Office Debt Coming Due This Year, Pushing Some Big Owners To The Brink / One wish for 2024. A more sophisticated approach to the workplace and hybrid working / An Exhausting Year in (and Out of) the Office / Do people want to return to office? Most say they do  / Remote is Better for Workers, Employees, and the Planet / The Bouroullec Brothers Split Up / and much more…


The Working Space
Monday, January 8, 2024

Industry News

Stylex Acquired by European Giant Flokk in a Contract Furniture Industry Shake-Up

In a significant development within the contract furniture industry, Stylex, a renowned American commercial/contract furnishings manufacturer, has been acquired by Flokk, a firm itself owned by Triton Partners, a private equity firm that is deeply invested in office seating and furniture. The transaction, expected to close by January 31, 2024, represents a strategic expansion for Flokk, solidifying its presence in the U.S. market and adding Stylex to its global portfolio of brands.

In the U.S., Stump & Company's M&A team played a pivotal role in initiating and advising on this transaction, serving as exclusive advisors to Stylex and its selling shareholders.

Stylex, known for its design-driven approach and functional products, will continue to function independently within the Flokk portfolio. Bruce Golden, CEO of Stylex, will lead the brand, which was founded in 1956 by the Golden family. With a headquarters and production facility in Delanco, New Jersey, and showrooms in major cities like New York and Chicago, Stylex boasts annual sales of around $50 million.

Bruce Golden expressed enthusiasm about the acquisition, noting, "Joining Flokk's family of global brands allows us to bring our unique innovation and design approach to a wider audience. Flokk's commitment to sustainability in the industry opens new doors for the Stylex brand, particularly in enhancing our supply chain and market access."

Flokk, a company with a rich history of organic growth and strategic acquisitions, has emerged as a leading force in the European workplace seating and furniture market, with annual revenues of approximately EUR 400 million. The acquisition of Stylex is a key component of Flokk's comprehensive growth strategy, further cementing its status as an industry powerhouse. With this acquisition, Flokk continues to expand its portfolio, having added eight new brands in the last nine years.

Lars I. Røiri, CEO of Flokk, highlighted the significance of integrating Stylex into their brand family. "The addition of Stylex complements our US-based brand, 9to5 Seating, and strengthens our position in task seating. This acquisition, combined with the growth of 9to5 Seating, fortifies the U.S. as our largest market, creating a balance between Europe and North America and deepening our global engineering synergies," Røiri stated.

Flokk, an Oslo-based company, owns several brands. Some of the companies it owns include HÅG, RH, Giroflex, BMA, RMB, Offecct, Profim, Malmstolen, 9to5 Seating, and now Stylex. These brands collectively offer a wide range of seating solutions and office furniture. The company was officially launched in 2017, but its heritage spans over 400 years, with its earliest brand, Giroflex, being established in 1872. HÅG was founded in 1943, and both RH and RBM were established in the 1970s. In 2007, these Nordic office seating producers merged to form Flokk. Triton Partners acquired Flokk in October 2014.

DIRTT and SourceBlue Announce Strategic Alliance to Transform the Interior Construction Procurement Process
DIRTT and SourceBlue have announced a strategic alliance to transform the interior construction procurement process. SourceBlue will offer DIRTT clients and Construction Partners a single point of contact for supply chain planning and procurement, while DIRTT will gain access to new markets. This partnership aims to address pain points in the construction industry and optimize workflows, communication, and cost savings. Benjamin Urban, CEO of DIRTT, commented: “Our partnership with SourceBlue aims to address the pain points and challenges faced by the construction industry during the interior procurement process. This alliance will enable DIRTT and our Construction Partners to efficiently source and procure construction materials while opening up new sales channels for both parties.”
The Manhattan office construction boom has ended, with only three large office towers currently being built in New York City. Rising costs, interest rates, and record office vacancies have contributed to the slowdown. The next wave of large office towers may not be completed until the early 2030s or later. This pause could impact the city's budget and property taxes. The average rent for office spaces is $75 per square foot, but future high-rises would need to charge $200 to $300 per square foot to be financially viable. Despite the challenges, some developers are still eager to build supertall towers, anticipating a future "flight to quality" where companies upgrade to modern offices. However, finding large and anchor tenants remains a hurdle for new projects.
According to Trepp, the CMBS delinquency rate in December 2023 fell to 4.51%, with the office property type experiencing a drop to 5.82%. However, overall U.S. CMBS delinquency increased by 147 basis points year over year. Retail had the highest delinquency rate at 6.47%, while industrial had the lowest at 0.57%. Despite some improvement, more properties are expected to face challenges in refinancing without surplus capital, and the chances of easier financing may decrease.
Record-high concessions in U.S. office markets are hindering rent growth, with high vacancy rates sustaining the trend. Landlords are offering rent-free months and tenant improvement allowances to entice tenants, particularly in lower-tier properties. The CBRE study shows that effective rents have dropped across all office building classes, with lower-tier buildings experiencing the most significant decrease. Shorter lease terms and tenant churn also contribute to slowed rent growth. The rising number of concessions is limiting rent growth in major markets, but leasing numbers are increasing for smaller spaces. Until conditions improve, concessions are expected to remain prevalent in the office market.
According to a report from Savills, office availability in the Los Angeles area reached a record-high of 26.7% at the end of 2023. Leasing activity decreased in the final quarter, while sublease figures slightly increased. The San Gabriel Valley, Santa Clarita Valley, and Century City submarkets had the lowest availability rates, while Park Mile had the highest. Despite the challenging market, some large leases were executed, particularly in Long Beach and Downtown LA. Government leases played a significant role in Q4, but office owners are still expected to face challenges in 2024. However, there is cautious optimism that the end of the writers and actors strikes could boost demand from entertainment and media tenants.
Manhattan landlords had a strong quarter in Q4 2023, with a surge in leasing activity driven by law firms and financial services. A total of 8.2 million square feet of office leases were signed, the highest since Q3 2022. Midtown was the busiest region, with 4.7 million square feet leased. However, average asking rents dipped and availability remained high at 17.9%. Despite the positive quarter, there is still a need for increased demand to outpace supply in the market.
Houston's office leasing declined by 35% in the last quarter of 2023, reaching a five-year low. Occupiers are becoming more cautious about landlord finances, leading to longer deal timelines and increased negotiation between occupiers and landlords. Concerns about office loan defaults and landlords' ability to fulfill tenant improvement obligations have resulted in a "flight to capital" trend. Houston's office market is currently tenant-driven, with high vacancy rates and landlords offering concessions. The duration of this environment will likely depend on the level of sublease and overall availability. Class-A offices are still performing well, with overall asking rents and Class-A rents showing increases.
A total of $117B in office property mortgages will be due this year, with some at risk of default due to difficulties in refinancing. The current climate and rising financing costs are making it challenging for owners to manage their debt. Major office owners across the country are experiencing financial stress, with delinquencies among CMBS loans increasing.

Features

An in-depth discussion of the exhaustion experienced by knowledge workers in the past few years, starting with the Great Resignation and the Remote-Work Wars. It highlights the increase in digital communication and its negative impact on satisfaction and well-being. The author suggests reducing digital communication and implementing new ground rules, such as using email for broadcasting information only and conducting substantive discussions during office hours. The article emphasizes the need for major policy changes to address the issue of communication overload and improve the sustainability and satisfaction of knowledge work.
The workplace is in a constant state of change, and the pandemic has accelerated this process. The idea of an idealized office or universal adoption of remote or hybrid working is flawed. Workplace evolution can be compared to evolutionary theory, with no end point but rather types progressing and finding their niche. The stages of workplace evolution can be framed as survival, inquiry, and sophistication. As the world changes, it is important to focus on current battles and not get stuck in outdated thinking. The office will continue to exist in new forms, as humans still have a need for social interaction. We should not assume that the world was built to fit us, but rather adapt to the changing landscape.

Workspace News

According to a recent survey, office workers believe they should spend more time in the office for optimal productivity, marking a change from the early months of the pandemic when remote work was preferred. Younger generations value the office as a place for work focus, socialization, and professional growth. Companies are adapting by creating office spaces that cater to the preferences of younger workers, including areas for collaboration, quiet work, and amenities like cafes and fitness centers. However, there is still a disconnect between desired office attendance and actual attendance, with efforts to boost in-person attendance falling short in some cases.
In 2024, significant workplace-related legislations are expected to be enacted. These include increased minimum wage in several states, restrictions on noncompete agreements, implementation of paid family and sick leave policies, and the banning of inquiries about salary history. Employers need to stay informed and take preparative action to ensure compliance with these changes.
Remote work offers flexibility, reduces greenhouse gas emissions, and attracts top talent. It allows employees to work in environments that nurture creativity and productivity, contributes to environmental sustainability, and requires intentional culture building and technology for collaboration. Embracing remote work challenges the traditional office model and paves the way for a more holistic, human-centered approach to work. It also enhances engagement, cultural diversity, and access to global talent, while reducing operational costs. Additionally, remote work significantly reduces commuting emissions, lowers energy consumption, and promotes sustainable lifestyle practices. It aligns with sustainability goals and demonstrates corporate responsibility. Skepticism about loyalty and company culture can be addressed through valuing employee well-being, clear goal setting, effective communication, and collaboration tools. The future of work belongs to those who embrace the remote work revolution, as it aligns with the values and aspirations of modern workers and visionary companies.

Design

After 26 years of collaboration, Ronan and Erwan Bouroullec have decided to end their creative partnership. The split was due to the pressure and clashes that had become corrosive over time. While they will continue working individually, their designs are expected to diverge, with Ronan focusing more on artistic expression and Erwan on technical aspects.
Designers are calling for the disappearance of certain trends in 2024, including 'neutral' interiors, the use of AI for design, robotaxis, squiggle furniture, greenwashing, and complacency around diversity and inclusion. Designers argue for more personality in interiors, a balanced approach to AI, sustainable urban transportation, a shift away from squiggle designs, genuine sustainability efforts, and a stronger focus on diversity and belonging.

Coworking

WeWork is seeking to reject eight more leases as part of its ongoing bankruptcy proceedings. The leases span across Dallas, Toronto, Atlanta, and San Francisco, bringing the total number of leases to be cut in bankruptcy to 81. WeWork has stated that all six locations mentioned in the motion are no longer operational, and its members have either been relocated or had their contracts transferred. The company aims to minimize the impact on its members and plans to stay in the majority of markets as it moves forward.

Latest Product News

Lola Takes the Stage at Scandinavian Spaces

Lola, a guest and dining chair offered by Scandinavian Spaces, brings a fiery spirit and bold persona to interiors. It has gained recognition, receiving awards from Interior Design Magazine, Metropolis Magazine, and NeoCon in 2023. What sets Lola apart is its multifunctional frame that offers flexibility, allowing users to sit or perch on the backrest. With attention to detail and refined stitching, Lola features a uniquely upholstered seat and back, while the steel frame comes in a variety of vibrant colors or subtle neutrals.

The creative process behind Lola is somewhat remarkable. Designer Margot Barolo developed the chair as part of an experimental collaborative project called "The Kinship Method," which aimed to challenge conventional norms in furniture design. After years of research and numerous prototypes, Lola emerged as a durable and comfortable chair, with a strong focus on sustainability. All parts of Lola can be separated and recycled, contributing to its circular lifecycle. Lola's creation sparks a new conversation and inspires fresh approaches to product design and development.

“Lola is a chair that wants to be your friend. Comfortable, fun, and reliable. Lola’s strong personality is the exclamation mark that will add character to any room and contribute to a great atmosphere. It’s a chair that’s easy to sit on, but how you sit on it is up to you – and sometimes the most important thing is that someone is there to support you.” - Designer Margot Barolo.

The X_x_X exhibition by Ford Bostwick features four chairs crafted with singular materials and explores the square cross-section of materials. Bostwick's design philosophy prioritizes simplicity, highlighting the material of each piece and allowing it to seamlessly work with other furniture styles. The exhibition also includes sitting-height mirrors and a six-hour video showcasing Bostwick's creative world. For more information, visit bybstudionyc.com.

Trends in Commercial Projects from Around the Globe

Pearl House, located at 160 Water Street in New York City's Seaport District, is the city's largest office-to-residential conversion project. The building now houses 588 market-rate units with abundant natural light and amenities such as penthouses and a rooftop amenity space. The three-year conversion was made possible by the city's As-of-Right Conversion of Older Buildings mandate. Pearl House serves as a success story in addressing the city's need for more housing and repurposing vacant office spaces.
Shive-Hattery helped RSM create a hybrid workplace in Fort Lauderdale, Florida. The new office features flexible workspaces, natural light, and stunning city views. Employees have the freedom to choose the type of space that suits their needs, from private offices to open collaboration areas. The design incorporates RSM's culture and the surrounding natural environment, with custom wall graphics resembling sunsets. The transformed office has drawn employees back to the office and provides a collaborative and vibrant work environment.

Upcoming Industry Events

Clerkenwell Design Week 2024
May 21-23, 2024 | 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.

NeoCon 2024
June 10-12, 2024 | 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.  

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

Orgatec is the International trade fair for office and property equipment. Held in Cologne, Germany.

Industry Briefing

Turf President Rob Perri Promoted to Vice President, Architectural Specialties - Brand Companies at Armstrong World Industries
Rob Perri, the President of Turf Design Inc, has been promoted to Vice President, Architectural Specialties - Brand Companies at Armstrong World Industries. In his new role, Perri will lead the architectural specialties companies within Armstrong, including Arktura and other acquisitions, to set strategy, accelerate growth, and leverage resources. Perri brings over 20 years of experience and will continue to serve as the President of Turf while taking on this new position.

Solomon Coyle YE2023 Financial Benchmarking Survey Now Open
The Solomon Coyle YE2023 Operational and Financial Benchmarking Survey is now open for participation. The survey includes aligned and non-aligned dealers and aims to provide data-driven insights for informed decision-making and a competitive edge in the market. Participating dealers who complete the survey will have access to the benchmark results, to be published in May 2024. https://solomoncoyle.com/benchmark/completing-benchmark-survey/

Arcadis unveils new Miami office dedicated to design in The Plaza Coral Gables
Arcadis has unveiled its new Miami office located in The Plaza Coral Gables. The state-of-the-art workspace was designed by Arcadis' architecture and urbanism team with a focus on sustainability and collaboration. The office features a welcoming reception area, open ceilings, large windows for natural light, advanced technology in conference rooms, and a flexible layout promoting productivity and well-being. The design reflects the company's commitment to creating innovative and sustainable workspaces.
Find the best Contract Furniture Industry jobs and hire the best talent.
Dear Stephen, I am a regional manager for a major manufacturer. I am not sure if you've heard about this occasional tension between manufacturers and dealers, creating a cause of frustration for sales management and irritation for our sales reps.
MOD, a leader in power and lighting components for furniture in the workplace, hospitality, education furniture industry is seeking an energetic and motivated individual to join our team as a Territory Sales Representative.
BRC Group, consisting of Tayco, Woodlore and BRC, is a leading provider of office furniture and workspace solutions. We are currently looking for a skilled and detail-oriented Director of Marketing & Communications to join our team.
BRC is looking for an enthusiastic Regional Sales Director to join our dynamic team.
Main Duties and Responsibilities: · Serve as main liaison and support person to our lab reseller...
MODSILVER, a premier provider of cutting-edge commercial table bases, table legs, and accessories that manufactures its products in the USA, is expanding its sales team and seeking independent sales representatives to cover select US territories.
We are seeking a dynamic and experienced Business Development Support Specialist to join Flatwater, a subsidiary of Ho-Chunk Inc.
As the VP of New Business Development Sales, you will lead a team of new business development salespeople while directing the development and execution of the business development vision, strategy, plans, and processes that drive sales, increase revenue, expand markets, and accomplish financial objectives in northern California.
As an On-Site Client Design Specialist, you will play a key role in partnering directly with our clients in the field at their facilities to achieve seamless moves, adds, and reconfigurations of their existing workspaces.
We are seeking a sales professional to represent our healthcare productsWashington, Oregon, Idaho and Alaska.
Indoff is expanding and in need of experienced outside sales professionals in your area.
Work with our Representatives in the New York City, Philadelphia and Washington DC markets to help grow sales.
created in Publicate