SOUTHERN CALIFORNIA—Concentrating on the amenities that will yield owners the most bang for their buck and that mean the most for their tenants will help them stay within budget when doing build-outs on tech space, JLL executives from three SoCal markets tell GlobeSt.com. The firm recently put out a report on the surprising places to find tech talent throughout the country.

We spoke with Daniel Walker, VP in Orange County; Julie Kilpatrick, VP in San Diego; and Carlos Serra, managing director in Los Angeles, about the must-haves, the expendables and using the most cost-effective methods for tech build-outs in each of their markets.

GlobeSt.com: When weighing build-out costs, what are the “must haves” for tech companies in your market?

Walker: Tech companies in Orange County are looking for collaborative and flexible space, fiber, work stations with sit-stand options, central pantry and a wellness-focused environment. They are making decisions based on attracting and retaining talent.

Kilpatrick: Tech companies are driven by talent acquisition and retention. The usual amenities like food service, access to natural outdoor space and a well-equipped fitness facility with bike lockers are consistent requests in San Diego.

Serra: In Los Angeles, tech companies are interested creating a space that is visually stimulating. This is often being done through technology, graphics or unconventional means (random artwork). This is critical to the firm's culture and feel of the space.

GlobeSt.com: Which amenities are not worth the extra expense in a build-out?

Walker: It really depends on the company. Tech companies may not find value in building a gym or training room within their leasable space. They will look to their landlord to provide these nice amenities: gym, café, conference/training center, outdoor gathering areas with Wi-Fi and activated social areas.

Kilpatrick: San Diego tech companies need to be thoughtful about the floor plans and layouts and accommodations made for access to natural light for some groups. Many companies need acoustically secured and enclosed spaces for minimal distraction and team war rooms for programming and project execution away from window lines to maximize their technology and collaboration.

Serra: It is very dependent upon the culture of each company. We see spaces that are built out and within a few weeks or months have dead spaces which are not utilized, yet the same type of space is heavily utilized within other companies. Often this is related to the maturity level of the tech company in that they may not have developed a strong enough culture yet to fully embrace the type of space they are moving into.

GlobeSt.com: How can landlords get the best bang for their buck when doing build-outs for tech companies?

Walker: Landlords can maximize asset value by having a high-quality long-term plan for the building rather than a sales pitch for a tenant. Every dollar a landlord invests in common area amenities will positively impact lease-ability, tenant satisfaction/retention, asset value and reputation. Tech companies want to be at a building that not only understands their needs and “gets it,” but acts on that understanding and delivers.

Kilpatrick: Landlords should start with the infrastructure. It's always a better investment to upgrade the electrical service (as an example) ahead of attracting new tenants since it will be much easier to close the deal at a higher price point quickly, showing you have been thoughtful and proactive in anticipating tech companies' varied and constantly changing needs.

Serra: Many landlords own vertical assets in Los Angeles, so the concept of a “vertical campus” is becoming prevalent. As such, a build-out for a tech company can mean a lot more than the actual leased space since the common areas and overall building amenities can be just as important for the tech company.

GlobeSt.com: What else should our readers know about tech build-out costs in your market?

Walker: Orange County's increase in STEM graduates is timely, considering the area's markets' increasing demand for skilled labor. This tech growth in Orange County will continue to drive increased construction activity.

Kilpatrick: On average, the San Diego tech companies' workforce and decision makers are a younger demographic where private offices and expansive board rooms are not the driving force behind designing their floor plans. Economy and value are highly important, along with flexibility within a landlord's portfolio to help accommodate swing space and sudden changes in the companies' occupancy strategies.

Serra: Build-out costs in Los Angeles continue to escalate, particularly for tech companies, due to the heavy design requirements pertaining to audiovisual and IT. This is further exacerbated by the building code changes over the last couple of years.

Instant Insights /

Keeping Build-Out Costs in Check on Tech Space

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