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Entries Tagged as 'Silicon Valley Office Space'

Report: Office Market Has Unquestionably Turned the Corner

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Colliers recently published it's 4th Quarter 2010 Office Highlights report for the US and Canada.

Summary:

  • Office Markets Look and Feel a Lot Better - But Higher Rents Still Some Way Off.
  • U.S. office vacancy rate down sharply - U.S. office market has unquestionably turned the corner.
  • Office occupancies up for a third consecutive quarter.
  • Rent picture again mixed.
  • Office construction slows to a trickle.

Some other interesting results:

  • Highest US Downtown Office Vacancy Rate - San Jose/Silicon Valley at 27.9% (down from 35% the previous quarter)
  • Highest US Suburban Office vacancy Rate - Las Vegas at 38.6%
  • Most Absorption for 2010 - Washington DC metro area at over 4.1 million square feet (Midtown Manhattan a close second at nearly 3.6 million square feet)
  • Lowest US Downtown Vacancy Rate - Raleigh/Durham at 5.3% (with a 33.8% suburban vacancy rate)
  • Averages -  Downtown Vacancy Rate 16% - Suburban Vacancy Rate 18.3%

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Investment Real Estate , Las Vegas Office Space , New York Office Space , Office Rental , Office Space Negotiations , Office Vacancy Rate , Silicon Valley Office Space , Washington DC Office Space

Re-Imaging Office Space for the 21st Century Employee

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For decades office space has pretty much remained the same. The top executives resided in enclosed offices with windows and doors while most of the staff members worked in cubicles. While the layout improved over the years with ergonomic advances, the basic layout and work style of offices remained more or less static.

Now that we are in the 21st Century, office space is being re-imaged completely by many businesses and the re-invention of the office is proving to be more productive. Office work styles are changing radically, driving some of these changes.
 
The last few decades have also experienced workers who remained with a business for a few years, then moving into other positions of higher levels in competing companies. Many businesses accepted this style of employment because few employees remained long enough to earn a pension and the associated costs. However, the cost of locating and training quality employees was very high and the experience factor that was lost began to cost many companies in the long run. This, too, drives the re-imaging of office space.

Silicon Valley was the first area in which non-traditional office spaces began to emerge. Google is a prime example of one of the first businesses to re-image their office space. Instead of a bullpen full of cubicles, workers have desks and equipment in

communities where those who work on similar projects can easily brainstorm at any time. If someone needs a few minutes to think in a quiet area, there are plenty of unique locations to do so, such as a large bathtub full of pillows facing a wall of aquariums. While some meetings are held around a table with chairs, employees have options to meet in comfortable lounges with comfortable furnishings or outdoors.  Areas for recreation are provided; including video game stations, a top of the line cafeteria and the entire area has data access so anyone can use their laptops anywhere they wish. If someone needs to go to the far side of the Googleplex, as it is known, they can jump on one of the readily available bicycles which can be used in the wide hallways or outdoors.

It may seem as if the re-invention of an office into this new style would cut productivity. The reverse has proven true, as the huge profits generated by the employees of Google has proven. Employee satisfaction is extremely high, making team members want to produce. Benefits and freedom to work in whatever style is preferred by the team members generates strong employee loyalty, reducing turnover so that training and experience is maximized.
 
This re-invention of office space looks and feels very radical at first, but when you think of how people really work and where their ideas are generated, it makes perfect sense. Seldom do cutting edge ideas emerge from a single person. Usually they occur when people are interfaces, chatting over a cup of coffee, or brainstorming together. Why should they be forced relegated to cubicles where they face barriers to communication and contact with others?

Google’s solution to what an office space should be and how it should functions has let other corporations, both large and small, to adopt changes which improve human contact and happiness. It has long been known that happy employees are loyal, trustworthy, and extremely productive. While unhappy employees may produce, many ideas that could earn millions in profit never come to light. The confinement inherent to traditional office space layouts is radically changing and your business may find that re-inventing all or part of your office space may increase productivity and employee satisfaction.

Having looked at one office re-invention, our next post on this topic will delve deeper into the drivers of office space re-invention. Then we will look at ways to apply these concepts to your own workspace.

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Flexible Workspace , Office Space Design , Silicon Valley Office Space

Shadow Office Space to Affect Office Space Recovery

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A recent article on Bloomberg.com discussed the impact of "Shadow Space" on the recovery of the office space market. The officeFinder Blog discussed the affect of "Shadow Space" on the market back in April 2010. We defined it as "Shadow Office Space is office space that is currently under lease by a tenant, but which is not being used due to layoff of employees." Here is what the Bloomberg article had to say:

"The U.S. office sector will be the slowest to recover as companies absorb empty space and advances in technology reduce the need for square footage, said Kenneth Rosen, a professor at the University of California, Berkeley.

Unoccupied “shadow inventory” accounts for 3 percent to 5 percent of total business leases, and that space will be filled before firms sign new rental agreements, Rosen, chairman of Berkeley’s Fisher Center for Real Estate and Urban Economics, said at a conference in San Francisco. Cloud computing and other tech advances let employees work away from offices, further reducing space needs, he said.

“Every company has shadow space,” Rosen, who also runs Berkeley-based hedge fund Rosen Real Estate Securities LLC, said in an interview yesterday. Most U.S. cities face prolonged vacancies because of the surplus, excepting Washington, New York, San Francisco, Boston and parts of the Silicon Valley, where technology and venture capital spur leasing, he said."

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Boston Office Space , New York Office Space , Office Space , San Francisco Office Space , Silicon Valley Office Space , Washington DC Office Space

Silicon Valley, Ca - Vacant Office space equal 15 Empire State Buildings

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A Bloomberg news report says Silicon Valley has the biggest office space glut since the dot-com bust, leaving the U.S. technology hub with empty high-rises and office parks that make it impossible for landlords to sustain average rents.

More than 43 million square feet of office space stood vacant in the third quarter of last year -- that's the equivalent to 15 Empire State buildings and a vacancy rate over 21% for the silicon valley area.

Asking rents averaged $34.56 a square foot for Class A space in the third quarter, 21 percent less than a year earlier. The rate for flex space was $14.16 a square foot, down 16 percent, according to CB Richard Ellis.

Commercial property foreclosures will at least double in 2010 and job growth is not expected to return for two years after that, held back by U.S. consumers who are saving more and changing their spending habits.

Unemployment in the greater San Jose area was 11.8 percent in November.

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