BROOKLYN, NY—A partnership between NAIOP’s office conference and Global Workspace Association’s annual conference, originally scheduled for Miami, is making for a dynamic and serendipitous event called The Office Evolution, November 9-10 in Brooklyn, participants tell GlobeSt.com. Pre-empted by Hurricane Irma, the GWA conference was rescheduled, and a partnership with NAIOP’s event creates a unique, multi-faceted event with a distinct focus on how office owners, developers and operators can benefit from the trends that are shaping the office sector nationwide.
We spoke with Greg Fuller, president and COO of Granite Properties Inc., 2018 NAIOP Chairman-elect, and a panelist on the breakfast general session “Mix it Up: Integrating Flexible Office Space,” and Kane Willmott, co-founder of iQ Office Suites, founding partner and broker of record for Spire Commercial Realty Inc. and president of GWA, who will also be speaking at the conference’s “Deep Dive on Traditional Financing” panel, about the partnership, and why flexibility is growing in importance in the office environment.
GlobeSt.com: What are some of the benefits of bringing together two organizations—NAIOP and the Global Workspace Association—for this conference?
Fuller: I believe that the two organizations have a synergistic reason for being. NAIOP is obviously broader than flexible office, whereas GWA is an independent organization for that space that is trying to further the understanding of the flexible work environment. This is a large topic for all office owners and users, and prior to Hurricane Irma, we were already maintaining a partnership of sorts: NAIOP had planned to be at GWA’s event, and GWA is presenting a session at NAIOP’s fall conference next week.
Wilmott: It’s kind of serendipitous. GWA is made up of operators of co-working space, from those who are just starting out to those with 40 years of experience. There are a lot of reasons why the membership of the GWA has a lot to discuss with the membership of NAIOP. The co-working and shared office space for many years has been focused on hospitality; it’s run more like a hotel than a landlord/tenant relationship. But it’s been a fairly small component of the market until recently. It’s only in the last five years that co-working has gotten so much attention and received explosive growth, so that now conversations are starting to happen between landlords and co-working space operators.
GlobeSt.com: What topics or trends are you looking forward to exploring at The Office Evolution conference?
Fuller: Many of our members and others who are going to be at the conference want to learn where the intersection of traditional landlord and co-working is—how symbiotic and how at odds is it? Co-working creates community managers and other jobs that are changing the hospitality sector, and landlords are having to do the same. The common amenities people are choosing to create and the type of tenant finish that co-working has started is bleeding over into other sectors, so there are now common areas within a tenant’s space as well as common amenities for the entire building.
Some landlords are still looking at co-working as competition, but the more progressive landlords are embracing it as an offering in their building and looking at it a little differently. That’s something we’ll talk about.
Wilmott: There’s so much overlap in terms of the two groups’ focuses. GWA has a conference every year where all the operators come together and share what has been done in other industries and what can be adapted to ours. We share what we’ve found. NAIOP a great place to make connections to secure transactions, and now we’re looking at this conference the same way. It offers our members an introduction to the real estate community and provides NAIOP members with perspective on how we curate a great user experience.
GlobeSt.com: Why is flexibility growing in importance in the office environment?
Fuller: It is what our customers are demanding. Flexibility has always been key in real estate: if you’re going to lease office space, tenants wants as much flexibility as they can get to decrease or increase in size or adopt technology. Landlords want to provide that flexibility, but they have banks to deal with and are looking at their investment; they’ve benefited from long-term relationships with their customers. The longer the lease term and the greater the tenants’ credit, the more valuable the property.
Flexible space is at odds with that, but more flexibility is required all the time, and co-working is one aspect of that. Whether it’s suites or flexibility within a bigger space, there are lots of ways the office environment is looking to provide flexibility to its customers.
Wilmott: Landlords are noticing that tenants are paying a lot of attention to co-working space, and many landlords have co-working tenants in their portfolio, so they’re starting to pay attention to it, and they see overlap in their business and product. They want to explore it more: Why is this so popular?
It’s causing a big disruption in the market right now. The technology change in the last five to eight years has allowed many companies to grow the way they wouldn’t have experienced otherwise. With screen-sharing and the cloud, geography is becoming less of a barrier. Many tenants don’t want to start out fresh with an office lease in a new market, and they don’t have to; it’s easier to do co-working, where they have their own private office. Landlords, on the other hand, want to make sure they’re not like Yellow Cab when Uber is coming in. They are realizing they can continue to lease space to co-working companies, but I think there’s a bigger conversation to have. Maybe they can partner with these co-working companies, and they’ll further monetize their space if they were to offer this model. I’m already seeing it in Toronto: landlords are looking at doing shorter-term deals but having tenants pay a bit more, and tenants are saying yes to paying more for flexibility.