A Growing Office Focus: Simplifying Employees' Lives

SAN DIEGO—Amenities like built-in fitness centers and high-quality food options will become increasingly important to office tenants whose goal is to attract and retain strong employees, NAIOP San Diego president Nelson Ackerly tells GlobeSt.com. As we recently reported, Ackerly, who is also senior director of leasing for Irvine Co. Office Properties, was recently appointed president of the San Diego chapter of NAIOP in addition to the rest of the board. We spoke with him exclusively about the office market here and trends he expects to grow over the next year.

GlobeSt.com: What do you expect to see in San Diego's office market in 2016?

Ackerly: Recent volatility in the global markets and in China specifically could result in a temporary slowdown in otherwise strong leasing activity as companies pause to gauge the markets. However, based on the continuing strength of the San Diego market, I'd expect to see a spike in leasing later in the year to compensate for any slowing. As an added benefit, the global volatility will likely drive investors to consider a more stable investment in real estate.

Market dynamics aside, local owners are adding dynamic amenities and services to meet the evolving demands of the workforce that cater to customers and employees alike. Those factors should contribute to a tight class-A market and rent growth. We've already seen the investments pay off, as inventory continues to decrease.

The reduction of class-A leasing opportunities will lead to a significant spike in activity in class-B and possibly class-C product. It will also result in a stronger push from local developers to pursue new projects to meet the demand.

GlobeSt.com: What trends are on the way next year?

Ackerly: I expect to see more focus from owners on how they can elevate their customers' businesses while simplifying the lives of their employees. An example: wellness in the workplace. Fitness centers are no longer an afterthought, owners are offering more high-quality and diverse food options and one of the newest trends Irvine Co. recently unveiled: a Scripps wellness center housed in an office project.

GlobeSt.com: As developers, owners and tenants strive to offer the best amenities for users, what changes do you foresee in this category?

Ackerly: In addition to enhanced wellness, fitness and food, I expect to see more of a focus on creating collaboration spaces and spaces that take advantage of San Diego's world-class climate. Work is now an extension of the home in many ways, and real estate owners are attempting to create the best possible spaces for customers and employees to innovate and be productive, as well as relax and reboot. They also want great food and service to be at their fingertips. They recognize that these types of next-generation amenities are key for recruiting and retaining top talent.

GlobeSt.com: What new landscaping trends do you expect to see in the office market in light of California's drought situation?

Ackerly: Owners are contributing to the reduction of water. Many have already installed smart irrigation systems, replaced grass with drought-tolerant landscaping and utilize reclaimed water. At Irvine Co., we are also looking beyond landscaping, installing low-flow plumbing and encouraging our customers to conserve. We are also looking to expand a pilot program to San Diego that involves installing Tesla “hybrid electric” batteries in our buildings to reduce electricity usage at peak times to reduce pressure on the grid.

San Diego's office owners are the most innovative and dynamic in California. It's among the reasons the region is one of the best places in the world to do business.

SAN DIEGO—Amenities like built-in fitness centers and high-quality food options will become increasingly important to office tenants whose goal is to attract and retain strong employees, NAIOP San Diego president Nelson Ackerly tells GlobeSt.com. As we recently reported, Ackerly, who is also senior director of leasing for Irvine Co. Office Properties, was recently appointed president of the San Diego chapter of NAIOP in addition to the rest of the board. We spoke with him exclusively about the office market here and trends he expects to grow over the next year.

GlobeSt.com: What do you expect to see in San Diego's office market in 2016?

Ackerly: Recent volatility in the global markets and in China specifically could result in a temporary slowdown in otherwise strong leasing activity as companies pause to gauge the markets. However, based on the continuing strength of the San Diego market, I'd expect to see a spike in leasing later in the year to compensate for any slowing. As an added benefit, the global volatility will likely drive investors to consider a more stable investment in real estate.

Market dynamics aside, local owners are adding dynamic amenities and services to meet the evolving demands of the workforce that cater to customers and employees alike. Those factors should contribute to a tight class-A market and rent growth. We've already seen the investments pay off, as inventory continues to decrease.

The reduction of class-A leasing opportunities will lead to a significant spike in activity in class-B and possibly class-C product. It will also result in a stronger push from local developers to pursue new projects to meet the demand.

GlobeSt.com: What trends are on the way next year?

Ackerly: I expect to see more focus from owners on how they can elevate their customers' businesses while simplifying the lives of their employees. An example: wellness in the workplace. Fitness centers are no longer an afterthought, owners are offering more high-quality and diverse food options and one of the newest trends Irvine Co. recently unveiled: a Scripps wellness center housed in an office project.

GlobeSt.com: As developers, owners and tenants strive to offer the best amenities for users, what changes do you foresee in this category?

Ackerly: In addition to enhanced wellness, fitness and food, I expect to see more of a focus on creating collaboration spaces and spaces that take advantage of San Diego's world-class climate. Work is now an extension of the home in many ways, and real estate owners are attempting to create the best possible spaces for customers and employees to innovate and be productive, as well as relax and reboot. They also want great food and service to be at their fingertips. They recognize that these types of next-generation amenities are key for recruiting and retaining top talent.

GlobeSt.com: What new landscaping trends do you expect to see in the office market in light of California's drought situation?

Ackerly: Owners are contributing to the reduction of water. Many have already installed smart irrigation systems, replaced grass with drought-tolerant landscaping and utilize reclaimed water. At Irvine Co., we are also looking beyond landscaping, installing low-flow plumbing and encouraging our customers to conserve. We are also looking to expand a pilot program to San Diego that involves installing Tesla “hybrid electric” batteries in our buildings to reduce electricity usage at peak times to reduce pressure on the grid.

San Diego's office owners are the most innovative and dynamic in California. It's among the reasons the region is one of the best places in the world to do business.