The thriving technology sector is playing an important role in the recovery of the U.S. office market, as recent rental activity indicates. According to CBRE Group, Inc.'s August 2014 research report, U.S. Tech-Twenty: Measuring Office Market Impact, the high tech sector has created one fourth of all office-using jobs created between 2009 and May 2014. The booming job growth in the tech sector is directly reflected in national office leasing activity. In 2014, the high tech sector accounted for 20% of all U.S. office leasing activity, making it the top office leasing industry in the U.S., and there is little reason to expect that percentage to drop anytime soon.
Office leasing activity rose 14% from 2013 to 2014, and the 2015 outlook is strong. Tech firms in both the private and public sector are indicating growth in the upcoming years, meaning office expansions are on the horizon, and with the high tech industry far outpacing its peers in growth, the leasing trend is expected to remain strong. What exactly does this growth mean for high tech companies in search of office space? The importance of finding the right office space for current and future needs is becoming increasingly imperative.
A business’s office space can have a significant impact on the business itself. As a long term investment, leasing requires careful consideration before making a move. Office spaces should be strategically located near target customers, while also offering the appropriate space to meet specific needs. As demand rises in the high tech industry and competition for office space increases, finding available space to meet company specific needs may become more challenging. Consider the following factors when evaluating your next office space:
You’ve heard it before: location matters, and for more than one reason. Accessibility and an enjoyable workspace are top priorities for employees who will be spending a considerable amount of time in their new office space. A comfortable and refreshing environment can boost productivity and employee satisfaction. A strategically located office can give your business a competitive advantage in both attracting and retaining employees and supporting customer engagement. Customers may need to be able to reach you if necessary, and proximity to peers and customers alike could make your business more accessible and better attuned to emerging trends in your field.
As detailed in an earlier blog post, understanding the nuances of your leasing agreement is key to understanding the restrictions and possibilities of your office space. Make sure you understand your total operating expenses, both current and future, including what sort of price escalations to expect over the years. Does the lease allow for expansion or alterations to the office space? As your business expands and new workstations or space are needed, you don’t want to be forced to relocate. Discussing your future plans and renewal opportunities with your landlord before signing a lease can alleviate costly issues in the future.
Efficient design goes beyond being eco-friendly. It also refers to the layout of the building and the work systems a space will foster. Current workflows will have to adapt to a new space, and how an office is laid out will significantly influence work productivity and communication channels. Consider factors like acoustics and designated work areas. How will different facets of the office interact, and how will that affect work dynamics?
If environmental impact is also a concern for your business, the building and amenity designs will also be worth considering. Does the building use efficient heating and cooling systems? Has your landlord installed other energy and water saving features in the building? Building design can impact your overhead costs. If an office space offers day lighting and eco friendly energy saving amenities, your business could benefit from long term savings.
With high tech industries driving the office market, finding a space that is compatible with your IT needs is crucial. Before beginning the office search, determine both the minimum and ideal data, space and security requirements needed to maintain your IT department. What data center requirements are needed for current and future growth? Will your current service providers be able to accommodate your new location, or would switching providers prove a better option? Envision the office layout and work flows before leasing. Will employees be able to work with ease and efficiency in the new space? Do you foresee any significant disruptions? Discuss concerns with your IT department to ensure a smooth office transition.
Leasing office space for your high tech company can be challenging, but knowing what to look for in a space is the first step to finding the right location for you. High tech companies will continue to drive the office leasing market in the near term. As part of the Tech-Twenty highlighted in the CBRE report, Washington D.C. and Baltimore can expect a steady rise in the already significant high tech office leasing activity. Now is the time to ensure your office space accommodates your needs, so your future growth will not be hindered by a competitive market.