I recently attended an IFMA Boston panel discussion on Mobility. The panelists were; Kate Thibeault, VP Governance, Policy and Process Optimization, Global Property, Pearson; Melodee Wagen, President, Workspace Strategies, Inc.; and Jessie Wigfall, Senior Manager, Design & Construction Operations, Liberty Mutual Insurance.
“Engagement” – All parties agreed that the greatest benefit of instituting a mobility program was the immediate boost in employee engagement. They shared that creating a flexible work program has a profoundly positive impact on most employees.
They shared the following lessons learned:
There must be senior leadership advocacy before initiating any mobility policy.
A solid partnership between facilities, HR and IT is critical for any launch to be successful.
In order to present a case for mobility, it is essential that the justification extend beyond the topic of cost savings and include the potential boost to employee performance and moral.
It is necessary to engage both Change Management and Employee Engagement consultants to support the process before, during and after.
Select one department as the “guinea pig”, ideally one that supports mobility. Track the metrics of their performance and satisfaction.
It is ill advised to assume that significant real estate savings will be realized. She cautioned that existing spaces should be reimagined as more fluid, open and collaborative.
by Deepa Venkat, IIDA, NCIDQ, LEED AP
With the evolution in workplace design, it’s clear that in the modern office, the needs of employees are paramount. Companies are focused on both attracting and retaining talent and looking ahead to accommodate the five generations of workers that will comprise the workforce by 2020. And it’s not just about the Millennials: organizations are preparing now for a more inclusive, flexible, and open workplace that appeals to different demographics and moves beyond the physical setting.
Looking back on the history on the modern workplace, there is a 10-year cyclical pattern to the changing office landscape. Popular “workplace theories” anticipate 2020 — and even 2030 — to bring yet further advances in how we work, and the generational shift in the workplace may force this even faster. So it begs the question: why design a workplace for employee demographics when we can design it for specific work activities? There are several factors at play in this future 2020 workplace.
Activity-based work. Dynamic, activity-based work (ABW) design creates a balanced variety of communal workspaces that correspond to the type of work performed throughout the day. Rather than assigning traditional workstations to staff, this model anticipates that employees will choose for themselves work areas that best suit their individual needs on any given day. ABW design moves an office from individual space to “we” space by offering both creative spaces and quiet work rooms without the worry of crowding or disruptions by one work style to another.
Technology and flexibility. The trend toward adaptable workspaces provides both employers and employees with the utmost flexibility in space allocation and work practices. For example, a huddle room could be used as a space for long-distance collaboration or a phone room/quiet zone for individual work. The adaptability shift is also supporting the introduction of “third or in-between” spaces with no defined purpose yet adaptive to the needs of the user. Workplace bring-your-own-device (BYOD) and choose-your-own-device) (CYOD) technology options support and allow flexibility and diversity.
Ecosystem of amenities. Companies are expanding their approach to office amenities to include spaces and services that provide a variety of environments for different tasks and behaviors throughout the day, and those spaces have become more high-quality, experiential environments. A meeting lounge might include a coffee table with an embedded interactive tablet or virtual and augmented reality technologies to support immersive collaboration with remote colleagues. Café spaces have become active, all-day destinations for impromptu casual meetings.
Humanize the work experience. Aligning with the trend for enhanced amenities, employee services and work environments are also becoming highly personalized. Corporate cafés are offering catered, gourmet lunch services to accommodate employees trying to maximize their productivity in the office. High-end residential design elements have crossed over into commercial office spaces, infusing comfort and familiarity into the workplace. Different furniture types, in a variety of textures and materials, lend visual interest and create a hospitality-style environment in welcome and gathering zones like reception, café/dining, and coffee bars. Digital building operations are making it possible to individualize the workplace experience more than ever before.
Coworking and proworking. Colocation is at the core of both these new work trends. One of the main advantages to coworking is the ease of collaborating with other companies sharing your space. Proworking is a natural extension of coworking, allowing organizations to overcome barriers presented by traditional real estate models and achieve greater flexibility by connecting with a vetted network of professionals (outside of their employee base) who need office space. The potential for cross-pollinating the creativity and talents of the workforce is enormous.
Companies will continue to optimize for collaboration and communication, as the multigenerational workforce seeks greater mobility and flexibility in the workplace. Different work settings and trends are ready to reshape the business landscape for the next decade and beyond.
by Dianne Dunnell, IIDA, NCIDQ, LEED AP
The most influential factor shaping the future of the workplace is quite simply, technology. Technology is helping to redefine workplace culture through the choices of technology available, the adoption of certain technologies over others, and the use of technology changing how and where we work.
Today we live in an always-connected, instant-access environment. Employees are working faster and more efficiently than ever and relying on mobile devices in the workplace, at home, and on the go. The next generation of workers, including Millennials and Gen Z, will be tied to their mobile phones, not their desks. To keep up, employers need to provide a workplace technology experience that matches the typical consumer technology experience with Bluetooth-driven or voice-activated devices. Forward-thinking companies are pivoting quickly and harnessing current trends to take advantage of new ways of working in the digital workplace.
The mobile revolution has inspired a giant shift in the way people communicate and access information. Communication barriers diminish and employee efficiency and innovation increase when technologies such as virtual meeting tools are integrated into the workplace. Companies should be mindful to put the technological infrastructure in place for employees to securely retrieve documents from different cloud-based platforms and mobile devices.
As productivity and collaboration tools become the norm, the volume of information hitting employees will continue to increase, and making sense of it quickly and prioritizing it effectively will be a key competitive skill. Companies are leveraging IoT, AI, and VR platforms to free employees to be more creative and efficient. These newest technologies and tools — in a dizzying array of categories — allow companies to create a smarter office environment, more focused customer service solutions, and more collaborative decision making.
Technology no longer defines the workplace but enables it. Just as many retailers are phasing out customer service email channels in favor of chatbots, companies are leveraging new web-based platforms and workplace analytics to offer employees optimized office environments. These technologies capture workspace usage, identify employees’ peak performance and productivity, and discover ways to improve processes, tools, and the workplace through employee feedback. For example, room and desk sensors are being used to promote employee wellness initiatives, offer insight into space usage, identify organizational inefficiencies, understand how much employees are collaborating and with whom, and provide data to facility managers to aid in real estate decisions. An additional benefit of workplace analytics allows for architects and designers to streamline the planning and design process while increasing satisfaction of the new workplace among teams.
The workplace is no longer just a physical space employees occupy during regular business hours. The workplace is evolving to define a company’s brand and express its culture as well as to address a changing workforce, information overload, and need for speed. The key to success, however, lies in the effective implementation of a digital workplace strategy.
New, exciting technology in three areas — real estate transactions, property ownership, and tenant/workplace occupancy — is creating a paradigm shift in workplace design and operations.
By Marc Margulies. Originally published in Building Operating Management.
September 7, 2018 – Commercial real estate has been managed more or less the same way for decades: An office building is constructed; a tenant/user occupies it; the occupant moves if more or less space is required or the lease has expired. New technologies offer opportunities to fundamentally change that paradigm. The new paradigm goes well beyond real estate. For example, we used to watch whatever channels were offered on television. Now we can select from a wide variety of entertainment sources and features (stream content, record programs, fast-forward through commercials, manage subscription costs, etc.). We interact with media and customize it to our liking, and we can do that now with the workplace too. This newfound technological interaction is disrupting every aspect of real estate finance, facility management, and tenant use.
There are three primary categories of disruptive real estate and facility management technologies:
-Real estate transactions
-Property ownership
-Tenant/workplace occupancy
Each technology category provides distinct benefits that facilitate better interaction and more efficient management. Yet the ultimate market driver of them all is tenant/workplace occupancy, because it is tenant users that create demand for real estate in the marketplace. A better understanding for the implications of these disruptive technologies can help building owners and facility managers design, build, and manage more responsive and cost-effective buildings.
Changing workplace
According to a recent survey by Herman Miller, 40 percent of workstations are occupied less than half the time, and private offices are on average occupied only 25 percent of the time. Building owners and facility managers are coming to realize what an enormous waste of resources this represents – one that feels increasingly jarring as we move toward a more shared economy. As we become more acculturated to businesses like Uber, Airbnb, Hubway, Getaround, and WeWork, among others, people are becoming more comfortable with the idea of sharing the workspace too. Many companies are shifting their workplace from fully assigned seating to “free address” space allocation for “activity-based work.” For employees who are not devoted to one focused task all day long, the free address concept allows them to choose where they want or need to sit based on their daily or hourly task, who they need to collaborate with, or what other adjacencies are important to their productivity.
In a seminar at Cornell University earlier this year, Christian Bigsby, senior vice president of worldwide real estate and facilities at GSK (GlaxoSmithKline), described how the company made this shift in workplace design. He said that “85 percent of the [office] footprint was dedicated to 35 percent of the work activities. We studied it in time and motion studies, and it is a classic misallocation of resources in a company. You cannot have one third of your activities supported by 85 percent of your resources. It’s a complete squandering of resources.” GSK changed its model to increase the variety of work settings. There are now seven different options, from a telephone booth to a 16-person conference room, to a simple adjustable, four-foot long ergonomic desk for answering emails or making a quick call. “Offering a variety of work settings shrunk our footprint by almost half in the office settings, and it changed how people used the space,” Bigsby said. “Our data shows that 95 percent of employees that use those spaces would never go back to the way they were.”
Managing such a dynamic office environment — one that must be highly flexible and responsive — is only possible through a software support platform that is both simple to use and portable, and those technology systems now exist.
An opportunity to increase productivity through collaboration lies in the ability to schedule gathering spaces appropriate to the size and needs of the team and then use the data to fine-tune facility efficiency. Boston-based technology firm Salsify uses the data from its scheduling system to verify that meeting room ratios function as they were designed and ensure that the quantity of rooms per size are aligned with utilization. “Since the system offers historical data, we can look back and compare what usage used to look like when we first moved in and what it has changed to now,” says Stephanie Peters, who manages culture, employee, and office experience at Salsify. Not only does the company maximize the use of meeting spaces, but by analyzing the database, the facility management team can identify trends and patterns in utilization, which allows them to know how and when they should reconfigure their space to assure maximum responsiveness. As Salsify prepares to move to new headquarters in August 2018, the company knows that the new space will fit their work patterns with precision, eliminating waste and promoting full-throttled collaboration.
The world of the Building IoT (Building Internet of Things) has enabled an increasingly robust interaction between the interior environment and its occupants. Sensors installed in office spaces, light fixtures, workstations, HVAC equipment, hardware, and audiovisual equipment facilitate the ability to gather data on activity, light levels, vacancy, temperature, security, and media interface. With the data comes the ability to understand patterns. The next step is then to use that data to improve outcomes. For example:
-Some systems gather data that allows users to track and understand patterns of interaction. Technologies like Rifiniti and Humanyze are “people analytics programs” that track how and where workers engage each other, with the goal of providing information on how best to plan for the most effective strategic adjacencies.
-We’ve all looked up at office towers at night, seen the lights blazing on empty floors, and wondered why all that energy is being wasted. Often the answer is that they need to be illuminated for the cleaning crew. The more fundamental answer is that the building does not have a sufficiently sophisticated lighting control system to dynamically modify the light fixtures. According to National Grid, 35 to 45 percent of an office building’s energy cost is due to lighting; the potential to save energy and money by turning off unnecessary lights is enormous. Companies are moving beyond just code-mandated occupancy sensors in offices in favor of control systems for open office areas too. As systems become even more refined, applications like Comfy, which was recently acquired by Siemens, allow users to adjust light levels to their individual preference. The Comfy app, which started out as a way to reduce hot and cold complaints, now also allows users to find and book available rooms and desks, and share immediate feedback with workplace teams.
-User comfort has always been of great concern to building managers. One person’s hot is another person’s cold. Not only do new energy management technologies allow for more efficient heating and cooling, but customized area controls are becoming more available. CrowdComfort, for example, allows individuals to use their smartphones to communicate with building management directly, facilitating micro-adjustment of systems to user preference, as well as smooth dialogue with building engineers.
-Security is of ubiquitous concern, for reasons related not only to life and physical property safety but also protection of intellectual property. Immediately post-9/11, reception desk greeters became security guards and front doors became entry gates. Nearly everyone now has a smartphone, which can be readily programmed with owner identification. Mobile access control has the advantage of simplified and centralized credential management, and offers the benefit of full data gathering and analysis. Knowing who enters and leaves a building — and when — can tie directly into a better understanding of how much space is really needed. An increasingly mobile workforce does not operate according to the more traditional 9-5 schedule; thus, the amount and location of required space must be more deeply scrutinized.
-Audiovisual systems have become the mainstay of collaboration. Few meetings in the knowledge economy are conducted without technology support, and screen sharing has become universal. Confirmation that the right AV is available for the meeting size and purpose is one of the functions of companies like TEEM, a software that not only schedules rooms and equipment, but simplifies the sharing and display of information.
Finally, there are applications that interface with services and vendors inside and outside the office building itself. Corporate cafeterias often now support the ability to order food via an app, either for individuals or catered groups, in advance of the rush-hour pickup. Many new dining facilities offer state-of-the-art software capabilities for viewing and ordering customized selections from any of the variety of their culinary options. Other services ready to ride this technology wave may include dry cleaning, health and wellness services, day care scheduling, and access to other amenities.
PTC, a global provider of technology that transforms how companies design, manufacture, operate, and service things in a smart connected world, is re-locating its global headquarters to a new 250,000-square-foot workplace in Boston’s Seaport District. As part of the design of a new physical work environment, PTC recognized the opportunity to meld its role as an innovator in software for product design, IoT, and augmented reality to make its headquarters a global model for excellence in the use of workplace technology. The task? Evaluating the most appropriate workplace management technology in an industry known for lightning-speed evolution.
“At PTC’s transformational and technology-rich new workplace, employees will be able to use Steelcase’s Room Wizard, coupled with Workplace Advisor, to maximize productivity, collaboration, and space utilization,” says John Civello, vice president of corporate real estate and workplace at PTC. “With sensors installed in all workstations and conference rooms, our facility managers will be able to identify areas of heavy utilization, and communicate with users how to change meeting schedules to avoid congestion or modify facilities to meet the need.” Another way to leverage the software is to measure heavy-use patterns in real-time, in order to anticipate pressure on the space before it becomes critical. “Since the workspace is 100 percent free address,” Civello says, “I don’t see how we could have done this without the tools that show us what is and isn’t working. We’d be at a major disadvantage [without them].”
Because PTC partners with a wide variety of building management systems and manufacturers, the company will ultimately use augmented reality modeling to assist with preventive maintenance of HVAC and other building equipment. Real estate and facility management executives will know that their building systems are being well-managed, running efficiently and cost-effectively.
Just as these disruptive technologies are transforming the workplace, augmented reality apps are starting to emerge to help visualize “smart city” activity such as entertainment events, traffic, retailer and restaurant offerings, harbor activity, and commuter options. The use of augmented reality as a real estate technology disruptor is just beginning to be explored, and is at least as exciting as when the cameraphone idea was first introduced. We will soon be able to see in virtual reality greater possibilities for our environment, and those possibilities will be linked to data that will allow us to fully customize what we see and feel around us. Buildings are moving from being simple bricks and mortar to living, breathing machines for human habitation.
Marc Margulies (mmargulies@mp-architects.com), FAIA, LEED AP, is a principal and senior partner at Margulies Perruzzi, an architectural and interior design firm that designs workplace, health+science, and real estate projects
-by Tim Bailey
With the increase in technological capabilities and millennials entering the workforce, it comes as no surprise that the workplace landscape is undergoing a dramatic transformation. Companies are having to work smarter and harder to inspire creativity, attract (and retain) the best and brightest talent, and enhance employee engagement.
How important are employee demographics when designing your new workplace? The answer is simple, it is very important. Not only does one need to know how people are working based on the product being created, but studies into the various generational traits are also an effective way to pinpoint which design philosophies can make a positive impact on your space. Let me give you a few examples.
Example 1- You are a new startup company, and most people that work there are 24-40 years old. In this case, you would look at the generational traits for Gen-X and Gen-Y (Millennials). In searching the core values for Gen-X and Gen-Y, the following adjectives surface:
Gen-X
Diversity
Independent
Self-reliant
Suspicious of Baby boomer values
Gen-Y
Fun
Optimistic
Self confident
Hotly competitive
That said, when looking at your office space, you aren’t likely to start with 30% of your space being closed office, nor would you start with high paneled workstations. These traits scream for open, fun, collaborative space to meet the needs of those Millennials. While the Gen-X crowd would be on board with many of these spaces, it might be good to have a few offices, and plenty of huddle rooms to choose from for when these independent Gen-X folks need their own space and privacy.
There are so many more ways to analyze your demographics and what those traits mean for the design of your space. At Margulies Perruzzi Architects, we help you to do just that, creating a workspace that fits your needs, and is a ‘Design for the way you work”.
An inspiration from MASS MoCA
-By Tim Bailey
Do you often go to a museum and get inspired by what you see? Well here is the good news; you can create this artwork for yourself, in your own style in your office, home or wherever you need a little inspiration. In my recent trip to MASS MoCA, I was inspired in a way that makes me re-think the traditional paint job, or lighting installation that can happen in the office space. After all, it must function to be successful, but it can also be a work of art for the people to enjoy. Above are some examples of what I saw that inspired me to re-think my next project.
By Dan Perruzzi, AIA, LEED AP, principal and senior partner at Margulies Perruzzi Architects. Originally published in Commercial Property Executive.
May 7, 2018 – Sustainability and green design have been trending real estate topics in the last two decades, especially when it comes to corporate office assets. Still, the benefits of energy efficient spaces come up more and more often in connection to employee wellbeing. The tenant-landlord conversation now covers how providing a healthier working habitat increases productivity.
But what makes a good working environment? Is the distribution of individual/common spaces in offices a difficult task? How does sustainability impact the value of an asset? We touched on all these issues and more in a discussion with Dan Perruzzi, principal & senior partner of Boston-based Margulies Perruzzi Architects (MPA). The studio is a member of the U.S. Green Building Council and the majority of its architects are LEED accredited.
What are the latest trends when it comes to workplace design?
Perruzzi: Companies are wrestling with the best balance between quiet and/or private space and collaboration space. Employees need private space, but they also need easy access to their colleagues for beneficial interactions. Individual, focused work has to be supported while simultaneously supporting group work.
Everyone is trying to do more with less. Companies are actively reviewing space standards to see where they compare with the competition. Metrics of area per seat and seats per assigned staff are critical areas of focus today. Given that in many areas basic sustainability has been incorporated into building codes, there is a greater focus on wellness and health in workplace design.
When you think of your recent workplace design projects, does a particular one come to mind?
Perruzzi: The Cimpress/Vistaprint workspace at 275 Wyman St. in Waltham, Mass., stands out. MPA designed the 315,000-square-foot, Class A office base building for the owner/developer—Hobbs Brook Management. Our knowledge of workspace design actually informs our building design process. As a result, the building is very efficient and offers great overall flexibility to the owner and their tenants, while at the same time offering great amenities.
The Cimpress workspace is designed around a high degree of openness with a real commitment to providing the right spaces for collaboration and social interaction. The overall flexibility of the building design has allowed Cimpress to sublet excess space to other tenants without drastic modifications to their own premises. The success of the Cimpress workspace is evident through their overall satisfaction and the positive impacts to productivity and wellness.
How does sustainable office design benefit the people working inside?
Perruzzi: Sustainably designed spaces have better air quality, low levels of harmful chemicals embedded in materials, better lighting and better access to daylight. All of these contribute to overall wellness and productivity.
In what real estate asset class do you see a growing interest for sustainability and why do you think that is?
Perruzzi: We see growth in existing building rehabs and technology spaces. In existing building rehabs, growth in sustainability is driven by competition. Sustainability is sometimes a “box to check” for tenants looking for space. If two buildings match up on most attributes (for example, on cost, available square footage, building class etc.) but one has sustainable design features, it can tip the balance in favor of that building. High-tech companies frequently have a younger, more diverse workforce, who often demonstrates a greater interest in sustainable design.
Would you say that passive design strategies are at the basis of sustainable design or are technology-related, active approaches more relevant?
Perruzzi: Passive design strategies were the initial basis of sustainable design. For instance, MPA used to spend a lot of time making sure materials didn’t contain harmful chemicals that could off-gas into the space, but the market has evolved. It is more difficult to buy the bad stuff now.
Technology is really driving the continued growth of sustainable design since passive strategies alone cannot meet the enhanced standards. The fine-tuning of HVAC, plumbing and lighting systems through the use of embedded technology will continue to drive the growth of sustainable design.
Tell us about one of the most recent and innovative green technologies you have implemented.
Perruzzi: MPA recently completed a new 694,000-square-foot global customer fulfillment center in Quincy, Mass., for Boston Scientific Corp., a worldwide developer, manufacturer and marketer of medical devices. Sustainability is incredibly important to this client and the modern, state-of-the-art facility is expected to achieve LEED Gold certification for existing buildings.
The new facility expands and modernizes the company’s logistics and distribution functions and aligns with the Boston Scientific Global Facilities Master Plan. Given the size and scope of the facility, the design needed to creatively mesh 64,000 square feet of office space with 630,000 square feet of warehouse and distribution space. This was critical to ensure optimal logistics, flows, efficiencies and quality system compliance in an FDA-regulated facility while also improving the office and work environment for end users.
The customer fulfillment center includes 2.5 miles of high-efficiency, “smart technology” motorized drive roller conveyor with a high-speed sortation system and the first installation of an enterprise warehouse management system for Boston Scientific Global Distribution. MPA worked closely with the conveyor and robotics systems designers and manufacturers on this green automated technology, which will result in significant cost savings in facility operating expense and energy reduction for Boston Scientific.
In your experience, how is sustainability/green certification impacting the value of a real estate asset and how do you see this going forward?
Perruzzi: We don’t believe that sustainable design changes the price of real estate. Owners would be happy to charge for a sustainably designed space or building, but they cannot do that and still remain competitive. Instead, sustainable design adds value as a “separator,” a feature that tips the balance as tenants evaluate their real estate strategy.
Going forward, there is still much work to be done. It is misleading to think that sustainable design is a given across a wide spectrum of the real estate market. Legacy buildings in many downtown markets cannot be easily rehabilitated into buildings capable of supporting sustainably designed space. The pressures of the marketplace will dictate how quickly those legacy buildings will be adapted.
About the author
Dan Perruzzi, AIA, LEED AP, is a principal and senior partner at Margulies Perruzzi Architects. Consistently ranked as one of Boston’s top architectural and interior design firms, Margulies Perruzzi Architects services the corporate, professional services, research and development, real estate, and healthcare communities. For more information, please visit www.mp-architects.com.
Originally published in NAIOP’s Commercial Real Estate Development Magazine
BOSTON – April 2, 2018 – Supply chain advances and new technologies are affecting how, where and what types of industrial facilities are being built. Much of the media coverage of industrial real estate today is overwhelmed by e-commerce oriented topics. Retailers continue to build out their delivery, fulfillment and return capabilities, in ways that are having significant impacts on the industrial supply chain and, consequently, on the location and design of buildings. E-commerce is undoubtedly driving significant change within the industrial property sector, but real estate developers and investors should also consider a variety of other disruptions and structural shifts.
These include key changes being made along the supply chain and how those changes are affecting where and how new industrial facilities are being developed today, as well as where and how they will be developed in the future.
SUPPLY CHAIN ADVANCES
Key changes unfolding in the supply chain include the following:
Multimodal Options. Wholesalers and retailers alike recognize that they need to create more nimble supply chains to accommodate evolving first- and last-mile activity. “First-mile” multimodal transportation options are becoming increasingly important. End-to-end supply chains are becoming ever more complex, and industrial real estate site selection will continue to be tied closely to cost efficiencies in transportation.Supply chains must become more nimble. Bringing multimodal transport options, including trains, electric vehicles and trucks, to the first mile helps streamline the process of distribution from the source to the end user, while also speeding up delivery.
A Fusion of Technologies. The Fourth Industrial Revolution and the digitization of the supply chain are both well underway. According to Klaus Schwab, founder and executive chairman of the World Economic Forum, “The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres.”Tomorrow’s warehouses will be increasingly driven by technology. They will be much more connected to logistics operations, powered by information systems and even more embedded in processes related to the broader supply chain.
Automation. According to a recent “MHI Annual Industry Report – Next-Generation Supply Chains: Digital, On-Demand and Always-On,” supply chain professionals view sensors and automatic identification, as well as inventory and network optimization tools, as the innovations with the greatest potential to create competitive advantages.
Emergence of the “Cold Chain.” While the online grocery segment is only in the beginning stages of its development, it is leading to need for new grocery-oriented logistics and state-of-the-art cold storage facilities that help companies get “closer to the customer.”
Yard Management. Improvements in yard management systems (software designed to oversee the movement of trucks and trailers at industrial facilities), dock scheduling software and warehouse management systems will create more integrated information flows to facilitate supply chain management, building more continuity, safety and accuracy into the process.
LOCATION CONSIDERATIONS
Mitigating Risks. As more companies look to employ predictive analytics and artificial intelligence to power their logistics operations, these processes could also affect their site selection decisions. Understanding how to mitigate supply chain risks is becoming ever more critical. Focusing on more accurate demand planning, management around natural disasters and optimal location and functionality of facilities is becoming paramount.
First-mile Efficiencies. While many of the innovations that could transform industrial real estate are technology related, some are more traditional. For example, multimodal logistics efficiencies can be realized from the “first mile” of transloading containers from a seaport to the “last mile” of delivery to the customer. Simply relocating or expanding near different transportation hubs can help reduce delivery time and costs while improving the level of service. Additionally, importers have to become more efficient in the first mile to offset growing congestion on highways near seaports and worsening truck driver shortages.
Throughout the current economic expansion, modernization and growth of the cold chain have continued to garner investor and developer interest. From seaport operations to airport hubs to inland intermodal destinations, innovative new real estate development around transportation hubs is occurring, both from an import and an export perspective. Here are two examples:
Port Logistics Refrigerated Services (PLRS) now operates a 130,000-square-foot intermodal cold storage and freezer facility at Berth 219 at Port Tampa Bay, which serves central Florida as well as the Southeast and Midwest U.S. with direct transfer via truck or CSX rail. The state-of-the-art building facilitates the import and export of food and other cold storage items throughout the region. It can handle break bulk palletized products as well as 40-foot temperature-controlled containers. The facility consists of four cold storage areas and two freezer storage areas as well as a truck staging area, a fumigation building and an office building with a U.S. Department of Agriculture (USDA) laboratory.
The Harbor Performance Enhancement Center (HPEC), a public-private partnership between the Port of Los Angeles (POLA) and a private consortium, plans to operate a 110-acre “peel-off yard” or staging facility intended to reduce congestion at the Port of Los Angeles. It is designed to accommodate approximately 3,150 containers from adjacent container terminals at any one time and to significantly increase efficiencies and throughput at the port.
The site, inside the jurisdiction of the Port of Los Angeles, has been idle since 2006. Meanwhile, container volumes flowing through the Port of Los Angeles, as well as the Port of Long Beach on the other side of the harbor, have recently regained and now significantly exceed their pre-Great Recession peak levels. Growth in container volumes, the advent of ships carrying two to three times as many containers as did ships prior to the recession, and new trucking regulations have combined to create serious congestion in Southern California. This has made the retrieval process for containers lengthier and, at times, unpredictable.
HPEC will lease the 110-acre facility and provide a valet-and-park service for importers. It will retrieve containers from the terminals and park them on chassis in the HPEC yard, so that importers can retrieve them at their convenience on a 24/7 basis. The resulting increase in the predictability of the dray from POLA to the importers’ facilities and the likely shorter time it will take to do this will reduce truck drivers’ idle time at distribution and transload centers.
Manufacturing. Finally, manufacturing is poised for more disruption and transformation in design than any other industrial sector. Employing more adaptive manufacturing methods like 3-D printing could create leaner supply chains and lead to the proliferation of smaller manufacturing facilities closer to major population centers.
Innovative new light production or light manufacturing incubators like the nonprofit The Hatchery Chicago or the L.A. Prep kitchen, both of which provide production space for food and beverage providers, are just two examples of how industrial spaces are accommodating a wider variety of uses. These types of facilities often incorporate coworking kitchen space, dry and cold warehousing, and loading docks, as well as meeting and/or office spaces.
IMPACTS ON BUILDINGS AND SITES
Industrial users are becoming ever more sophisticated, insisting on buildings that are highly functional. According to Jimmy Love, managing partner of Distribution Realty Group, building attributes that were previously considered premium improvements found mostly in build-to-suit structures are becoming more common for new speculative construction. These include 36- to 40-foot clear height ceilings, dedicated on-site trailer storage, 60-foot speed bays, LED lighting and oversized employee parking lots.
New Amenities. Demand for new amenities in industrial parks is growing. In recent years, as e-commerce and associated sectors like delivery and third-party logistics have expanded aggressively, the number of workers picking and packing orders in megasized fulfillment centers has increased. So have the number of workers at traditional warehouse and distribution operations. Attracting and retaining skilled labor has become even more challenging. To keep employees motivated and increase productivity, companies are bringing in more amenities such as expanded eating, lounge and fitness facilities to warehouses and industrial neighborhoods.
Human-centric Design. Some of the newest industrial facilities in Asia contain even more amenities, with people-oriented features such as cafeterias, day care centers, locker rooms, gyms and yes, even rock climbing walls. Developers like ESR-REIT (formerly Cambridge Industrial Trust REIT), which develops and operates industrial facilities throughout Asia, have included these above-standard amenities in some of their new logistics developments, as well as relaxation lounges, retail shops and more sustainable design.
This trend also extends into innovations in personnel safety, especially around loading dock areas and equipment. Using more cameras and red or green lighting systems on dock walls and floors at dock levelers to signal safe loading and unloading execution helps prevent accidents.
Robotics. Goods-to-person picking and collaborative robotics are redefining movement within the distribution center. The goods-to-person concept involves incoming goods being automatically retrieved from storage and brought to a human “picker” rather than the traditional person-to-goods picking model, in which a picker travels around a fulfillment center gathering goods
to fill orders.
Collaborative robots are programmed to work safely alongside humans; many can be easily programmed to perform a variety of tasks as needed. Automated guided vehicles (AGVs) are portable robots that follow wires or tape in or on the warehouse floor or use vision, magnets or lasers to navigate through a warehouse. They offer many cost-saving benefits such as improved safety and accuracy as well as reduced damages.
In addition, drone technology is becoming a reality in some warehouses. A new system developed by researchers from MIT uses drones to track inventory in warehouses by scanning existing radio-frequency identification (RFID) tags.
Wearables. Worker productivity and accuracy can be improved through the use of wearable technology with features like augmented reality, which superimposes a computer-generated image on a worker’s view of the real world, or voice picking. Headsets, wristbands and other wearables can route workers throughout a warehouse more effectively.
Sustainability. Many companies have incorporated sustainability and energy efficiency initiatives into their supply chains. While initially this could primarily impact transportation via the use of more energy efficient vehicles, the real estate implications are also significant. Incorporating LED or natural lighting, cool roofing materials and even sustainable packaging can affect building efficiencies. Smart building innovations are allowing large, sophisticated developers to create efficiencies and operational savings for their customers, according to Jeannie Renne-Malone, vice president of sustainability at Prologis. Harvesting data from these facilities will enable the design and development of even more sustainable industrial facilities in the future.
Incorporating solar power into warehousing space offers various upsides. The overall corporate and social impact is not being lost on many major companies. Larger developers like Prologis have the scale to meet growing customer requirements with a rooftop solar program. Developers are also incorporating water-saving technology, irrigation and landscaping into new warehouse design to meet customer demands.
Accommodating Autonomous and Electric Trucks. With electric and semiautonomous trucks becoming a reality in the near future, site and yard designs will need to adapt. Building owners may need to install dedicated electric charging stations for trucks on-site, embed sensor technology into loading areas and yard spaces, and/or create new safety protocols for trucks within overall warehouse operations.
WHAT WILL THE FUTURE BRING?
The disruptions and structural shifts described above are already having a significant impact on where and how industrial facilities are being developed, and will continue to do so for the foreseeable future. It’s impossible to predict what types of changes the next set of significant advances will bring, but real estate professionals who keep an eye on the future will be well positioned to recognize and make the most of them.
Originally published in IFMA’s FMJ Magazine. By Alvaro J. Ribeiro, AIA, senior architect at Margulies Perruzzi Architects
BOSTON – February 1, 2018 – A building’s curb appeal, image and energy can make or break first impressions. Creating places for people to experience a property – whether it’s first walking through a wonderful entry courtyard or just stopping to sit and talk – can cement a building’s identity in a visitor or prospective tenant’s mind. This process of placemaking starts with thoughtful exterior design. Elements such as landscaping, canopies and outdoor amenities are a valuable part of a building’s identity. Creating outdoor amenities as an extension of the workplace is emerging as a national trend in major cities across the country, with real estate developers and facility managers playing a significant role in their management and operation.
Just as interior amenities such as corporate cafés, fitness centers and game rooms are becoming common features, companies are beginning to tap into the value of outdoor amenities to make properties stand out, create inspiring and motivating exterior work environments, and support a sense of well-being and community.
Property owners increasingly understand the important impact on attracting new tenants by integrating highly desirable amenities in new and redeveloped office buildings. Building owners and tenants are keen to bring the outside in, often with features that stream natural light into the office and support plant-covered “living green walls” for example. They are also enticing people to work, exercise and socialize more outside as well.
In urban areas, outdoor amenities, like roof decks and gardens, Wi-Fi-enabled outdoor seating areas, and access to bike-sharing, are cropping up. In the suburbs, outdoor amenities like putting greens, recreational trails, and central courtyards draw workers outside at various times during the day.
Outdoor amenities are helping building owners, tenants, and facility managers address the values and habits of an evolving workforce, promote increased employee wellness, and turn real estate assets into a competitive advantage. All of it requires a coordinated effort and a shared vision between real estate owners, corporate human resources, and operations.
Successful Strategies
Competition for the best talent is fierce, and facility managers have a role to play in attracting and retaining employees. Forward-thinking organizations are re-evaluating their workplace strategy and appealing to talent by offering rich amenities that support well-being, provide a sense of community, help reduce stress and employee turnover, increase teamwork, and strengthen the company’s vision and values.
Millennials in particular desire amenities like roof decks, landscaped patios, casual seating areas with fire pits, and recreational spaces because of the social interaction and work-life balance these environments help create. Offering small communal settings where people can work, eat, learn and play is essential for increasing social interaction and employee engagement, both inside and outside the office.
In fact, when it comes to the top five ways to improve employee engagement, creating a sense of community ranks number one on the list. The physical workspace is an important aspect of promoting employee engagement, and companies understand that creative and innovative employees need flexibility in the work environment to do their jobs. The Steelcase 360 Report on engagement and the global workplace found that 67 percent of companies have outdoor seating areas, a trend that shows a successful workplace strategy includes offering a variety of interior and exterior communal settings that help drive individual productivity and wellbeing, as well as an organization’s success.
The Human Factor
Most employees spend 80 percent of their day inside, and sedentary lifestyles are known to negatively impact health. A 2017 study from Columbia University Medical Center found that being in the same position with little or no movement for 60- to 90-minutes over several hours each day increased the risk of early death – even in those who exercised.
However, even small changes in scenery and business practices can counter the negative effects of sedentary behavior. A 2015 study from the University of Miami Miller School of Medicine found that changing just one seated meeting into a walking meeting per week, increased work-related physical activity levels by 10 minutes. Office workers participating in the study conducted weekly meetings in groups of two or three, and were asked to wear accelerometers to measure activity levels over three weeks. The study suggests that modifying traditional seated meetings to walking ones is easy to implement and conduct during regular working hours.
Given that 80 percent of every business’ operating costs are spent on people, many companies have turned their focus on how the workplace, and the ways we work in and out of it, can promote wellness for employees. Studies show that healthy employees perform better, take less sick time, and are far more productive. Companies have been responding to higher health insurance costs and the uncertainty of the health care industry for several years by investing in programs and strategies that help employees stay healthy. This next level of wellness will require reimagining the modern office.
As wellness in the workplace evolves, so does the overall thinking about how facility amenities can keep employees healthy and help them perform at peak levels – beyond offering health insurance or access to the company gym. That’s why many landlords and property managers are now looking to make better use of the premium outdoor space surrounding their suburban buildings by creating gardens, outdoor rooms, and walking areas that support wellness and social interaction. Facility managers are weighing in on how companies can incorporate interior and exterior features that encourage employees to get away from their desk, move around more, and experience the physical, mental, and emotional benefits of fresh air and the natural environment.
With this goal in mind, more companies and building owners are beginning to offer outdoor recreational programming and walking trails that provide stress relief and opportunities for fitness. The global headquarters for Boston Scientific Corporation in Marlborough, Massachusetts offers an inviting environment to get fresh air and sunlight during the work day. The campus features a landscaped courtyard, accessible to and linking all four buildings of the campus quadrangle, that provides a series of outdoor rooms and vegetated meeting areas. The landscaped courtyard is regularly used for small meetings or casual outdoor relaxation and company outings. At 101 Station Drive, a 208,000 SF repositioned and renovated office building in Westwood, Massachusetts, the open lawn in front of the building is often used for tai chi classes in good weather.
Outdoor workspace and amenities contribute to social and emotional well-being too. The dynamics of community and collaboration are being challenged with the rise of the mobile workforce. Shared outdoor workspaces are the bridge between traditional office space and independent remote work because they offer opportunities to gather, collaborate and socialize in an open, natural and relaxed setting.
Office buildings in major metropolitan areas are being transformed with the outdoors in mind. For example, Boston Scientific Corporation’s new global customer fulfillment center in Quincy, Massachusetts enhances the employee experience with a variety of high-end amenities, including a waterfront roof terrace with adjoining full-service corporate café. As the jewel of the building, the 2,000 SF waterfront roof terrace, with Wi-Fi connectivity, reconfigurable outdoor casual seating and conference spaces, offers stunning views of downtown Boston and provides a compelling amenity for employees.
The O&M Viewpoint
Facility managers can play a critical role in the selection, use, and upkeep of outdoor amenities, as they are often most attuned to what amenities make the most sense for a building and the people working in it. They can also play a key role in advancing the building owner’s – and tenants’ – vision for the use of these shared outdoor spaces.
Facility managers can bring valuable insight to issues such as understanding the structural requirements and permitting process for a new roof deck or the accessibility and connectivity needs for walking trails and outdoor meeting spaces. When it comes to deciding on what amenities to invest in, facility managers may be asked to think beyond the cost and consider the greater benefits outdoor amenities have on the potential to increase engagement and productivity, lower health costs, and reduce time away from work.
The maintenance and use of outdoor spaces in urban areas can significantly differ from those in suburban locations. Hosting events after-hours on a roof deck may require additional evening facility management staff to override lighting controls and monitor the security system, while accommodating lunchtime food trucks in the courtyard of a suburban office complex may require nothing more than scheduling. The timing of maintenance should also be considered, to make sure that the grass is cut for a fitness class or that sprinklers do not go on when people are congregating outside.
Finally, remember that outdoor amenities can help distinguish office buildings as a marketable property and can be a deciding factor for discerning tenants. With rents on the rise in most cities, appealing amenities – both inside and outside – could make the difference in creating a leasable real estate asset for the building owner.
As more companies and landlords integrate outdoor amenities into office life, this workplace trend will continue to have significant impact on how facility managers operate and maintain exterior areas and grounds in the future.
