Space Matters: How Competition for Talent is Changing the Workplace

Space matters. It’s one of the core tenets of the commercial real estate industry.

As companies face continued competition, corporate real estate is one their best tools to attract and retain top talent.

But what goes into the space companies want has also shifted over the years.

Some of the most significant changes to the occupier workplace in recent years have revolved around workplace density, amenities, parking, and landlord concessions.

Density

Since the Great Recession, many companies have shifted to a more open office design, allowing for more collaboration as well as less square footage per employee.

On a national basis, the average density has dropped from 211.4 to 193.8 square feet per employee since 2009 – an 8.3 percent drop.

While the rate of change has slowed during the past few years, the trend of denser offices is likely to be nudged further along in the near future. New lease accounting rules will require public companies to include lease obligations on their balance sheets – a liability they will likely look to minimize.

Amenities

Another aspect of the office environment which has undergone a realignment during the past several years is the concept of amenities – particularly with the Millennial generation now representing the largest sector of the workforce.

Tenant and landlord priorities for those amenities are varied. However, the options which received the most responses as the most important amenity were parking (24%), fast-casual food options (24%), conference facilities (12%), and fitness centers (12%).

In addition, while no respondents in Cushman & Wakefield’s survey listed outdoor spaces or tenant comment areas as their No. 1 option, when respondents listed their Top 5 choices, they pulled 53 and 44 percent, respectively. Fitness centers were the most common response, ranking in the Top 5 of 77 percent of responses.

Parking

At a national level, it’s a situation focused primarily on the Northeast, where spots averaged $357 and there was an allocation 2.2 per 1,000 square feet of space. No other region had a per-price spot of more than $165.