Office Property Opportunities
EisnerAmper and iGlobal Forum’s Global Leaders in Real Estate Summit included a panel on “Opportunities in Office Properties: Analyzing Job Data to find the Right Market.” Moderated by Andrew Scandalios, senior managing director of HFF LP, the panel focused on the fundamental shift in how office users are utilizing space and where the next big market for the office sector will be.
While the focus for tenants was previously on reducing space, users have shifted their attention to open space and the amenities. Cynthia Foster, the president of the National Office Services at Colliers International NY LLC, started the conversation by describing how certain amenities, namely food, wellness, privacy, collaborative space, productivity and technology, are what office users are prioritizing in finding new space. Michael Maturo, president of RXR Realty, added that as millennials age and start families, they are looking for more privacy as well. Office buildings are moving to an environment of collaboration and community in which there are amenities available to the tenants, such as hair salons and fitness facilities. Norman Sturner, founder and CEO of MHP Real Estate Services, explained that adding these services will keep employees in the building and make it socially acceptable to stay at the office longer. But there has to be a place where the walls are not completely made of glass. Meir Cohen, CEO of Cohen Equities, countered slightly saying that location is the amenity. And if the location is right, that is more than enough.
David Gilbert, CEO and CIO of Clarion Partners, offered his perspective and discussed the intense competition that exists for talent. Employees will go where they see a competitive advantage – so companies need to be in attractive locales to compete for top young talent. For example, Dallas was brought up as an affordable city with great infrastructure in close proximity to an airport, making it attractive for young individuals and therefore well-positioned for office growth.
The panel concluded with Mr. Maturo speaking about office space in NY. While the market has seen a decline in sales volume, he feels that due to the existence of capital and top talent in NY, it is only a matter of time before the supply in the market is digested and trades will return.