REITS Respond Differently to Demand for Office Space
Earlier this year, the demand for office space in the Canadian market was on the rise particularly in the major city centers. Local REITs have seen it and have responded…differently.
Allied Properties REIT and Dream Office REIT are the two main REIT companies in Canada whose portfolios primarily contain office spaces for rent or lease. In the nine months ending September 30, 2014, Allied Properties REIT had invested $210 million in acquisitions of seven properties with 568,000 square feet of GLA (gross leasable area) and 553 parking spaces, and another $15 million in 460 King Street West in Toronto, all of which are now part of its rental portfolio. In that same period, Dream Office REIT sold eight properties for a total of $71.5 million and invested $20 million in building improvements aimed at attracting and retaining tenants to the remainder of their portfolio.
Leasing activity for both REITS remain strong. Allied Properties REIT leased over 831,000 square feet of office space in nine months, plus an additional 59,500 square feet at 250 Front Street. As of last week, it was still negotiating five new leases which, if completed, will increase its GLA by 70,000 square feet. Dream Office REIT has already leased 810,000 square feet of office space to date with 219,000 square feet being in the Greater Toronto area. Portfolio occupancy for both REITS remain strong at 93% for Dream REIT and 91.6% for Allied Properties REIT.
What does this mean for business owners? In short, if you are thinking of renting or leasing office space in Canada, act quickly but responsibly. Available office space is out there but there may be slim pickings when finding the ones that would be ideal for your organization.
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Emory, Michael R., Allied Properties, “Allied Properties Real Estate Investment Trust Announces Third-Quarter Results with Continuing Broad-Based Momentum”, Market Wired
Dream Office REIT, “DREAM OFFICE REIT REPORTS THIRD QUARTER 2014 RESULTS”, dream.ca/office
Avoiding the Inadequate Internet Service Post-Move Growing Pain
So, you found your office space. You move in. After all the furniture is in place, you sit down in front of your computer to try to get online, only to find that the internet service is not available or that it is very slow. What could be happening? How could this issue have been avoided?
Similar to the phone service, your internet service provider will need ample notice of your intent to move, the future address, and the move date as well as your company’s specific internet needs at the new location in order to ensure the internet service is activated once you move in and is adequate to meet the demands of your business operations.
An optimally running internet service would be contingent on at least two things:
- The capacity of the internet line servicing your specific location.
- The actual amount of traffic the internet line handles at any given moment due to the number of other organizations or entities sharing that line.
Hence, when in contact with the internet service provider, it is important to find out the maximum amount of traffic the internet line servicing your new location can handle as well as the maximum amount of traffic the line has handled within the last six months. Compare the difference with the maximum amount of traffic your organization could potentially put on that line. If your organization’s internet service demand is greater than the resulting difference of the above, then you may want to request that either a separate dedicated internet line be installed for your business’ use only or that fiber-optic communication lines (which are capable of transmitting over 100,000 terabits of information) be scheduled for installation in the area of your new location.
Using the above suggestions, the chance of having a bogged-down internet system inhibiting your business operations can be avoided.
Avoiding the Inadequate Phone Service Post-Move Growing Pain
If there is one thing a business does not need after moving into a new office space, it is an inactive or inadequate phone service.
The lack of a phone service could mean one of two things:
- The phone lines at the new location have not been activated, a result of either
- the phone service provider not being aware of your intent to move (which, believe it or not, is quite often the case),
- extenuating circumstances rendering the existing phone lines to be temporarily inoperative , or
- the lines simply do not exist
- The existing phone lines do not have enough capacity to meet your particular business needs
Regardless of the reason, ensuring your new office space has adequate phone service upon move-in requires adding the following to your pre-moving plans:
Have either a member of your organization or a representative of your third party Office Move Management Team contact the local phone service provider to inform them of the following:
- Your intent to occupy a new location,
- The future address,
- The move date, and
- Any specific phone service needs that will be required on your new site (e.g. phone lines must accommodate an additional number of phones for new staff members joining after the move date).
We typically recommend that the above be done at least two months prior to your move-in date. That way, your phone service provider has enough time to either ensure the phone lines servicing the new site exist and are adequate to meet your business needs, or, if necessary, schedule a technician(s) to install extra lines and ensure they are activated on your move date. It will also give you an opportunity to reconfirm the scheduling of phone service activity one month and then two weeks prior to your move date.
So, avoid the aggravation. Making sure adequate phone service is activated when you need it is just one more step towards minimizing disruption to your business operations and maximizing the opportunity for your business’ success.
Avoiding Post-Office Relocation “Growing Pains” – Ask the Right Questions
Ok. So in one of my previous blogs, I pointed out seven post office relocation “growing pains” to avoid, namely
(1) Insufficient office space to facilitate growth
(2) Insufficient electrical outlets and/or voltage for office equipment
(3) Noisy or disruptive heating/cooling system
(4) Telecommunications limited or not activated at new site
(5) Insufficient internet services available for your business needs
(6) Lack of transportation options for staff to get to the new location
(7) Lack of parking available
One strategy to avoiding the above is by asking and answering the right questions.
- How much staff and equipment do you currently have?
- How many additional staff do you foresee hiring within the next five years? What about equipment?
- Do any of your staff need closed-in offices? How many will be in cubicles?
- What about meeting rooms, lunch areas, storage areas?—how many would your organization need?
Your answers to the above questions multiplied by the knowledge that the standard space allotted to each room or staff member ranges from approximately 36 sq.ft (for a small cubicle) to 300 sq ft (for a large office) can help determine the ideal size of your office space should be in order to meet your current and future business needs.
Some office environment questions you may want ask include,
- Is that heating/cooling system noisy or quiet?
- What about windows – are there a lot or very little?
Why these questions? Background noises such as the low hum of a heating or cooling system could prove to be quite distracting especially if your organization regularly conducts meetings via conference calls, webcast or Skype. As for the windows, studies have shown that employees tend to work more productively if they are able to see the outside from their work areas.
Here are some more questions you may want to consider regarding the geographic location:
- Outside of walking or driving a personal vehicle, is the potential new location easily accessible by public transit?
- Are there a variety of eateries, post offices, and other services nearby that would be complimentary to the function of your business ?
Finally, to avoid technological “growing pains”, one should seek answers to the following questions:
- How many outlets are available for your equipment?
- What about your telecommunication needs such as telephone, internet availability? Can the telecommunication services in the new area accommodate your company’s current and future telecommunication needs?
It can be easily overlooked, but I can’t emphasize enough how important it is for businesses to actually know what their organization needs in relation to their office space to function effectively. Asking the right questions, and aiming to get the right answers is a step closer to helping your business hit the ground running once your office move is complete.
5 Tips On Avoiding the Post-Office Relocation “Growing Pain” of Insufficient Office Space
There is probably nothing more frustrating than moving into an office space that is insufficient in meeting your current and/or your future business needs. Avoiding this dilemma requires some proactive planning.
First, you need to know what you are starting with and what you want to end up with by the end of the lease term. You can do this by
- Acknowledging what you have and/or need in the short term (staff wise and equipment-wise)
- Having a five-year business plan that details anticipated changes in staff and equipment
Second, take measurements of all the office furniture and office equipment you plan to move into your new office space in the short term. With this information, you will be able to accurately plan the layout of your new office space based on actual rather than assumed information related to your office furniture and equipment.
Third, consider your staff (current and future) and the type of work spaces they will need to function most effectively. How many will need to be in collaborative workstations? How many will need closed-in offices? What about meeting rooms, lunch areas, storage areas?—how many would your organization need? Your answers to these questions multiplied by the knowledge that the standard space allotted to each room or staff member ranges from approximately 36 sq.ft (for a small cubicle) to 300 sq ft (for a large office) can help determine the total ideal size your new office space should be in order to meet your current and future business needs.
Fourth, when checking out a potential office space, walk with a measuring device and use it to document the square footage (or square metres) of the office space. If the office space is somewhat irregular in shape, then take note of wall lengths and heights and the angles these walls create when they meet.
Finally, before signing any lease agreements, take all the information from the previous steps and create basic office space design layout. This can be done either by using design software or on paper with 2-dimensional cut-outs representing the office furniture and equipment, or you can have a professional office space planner provide one for you if you do not have the time or resources to do this yourself. Having a visual of each potential office space can help you determine which space would be optimal for your business. Just make sure your office space layout is to scale so that your decision is an accurate one.
There are other factors to consider when choosing the right office space such as electrical and internet capacity, but following the above can at least help ensure that your next office space is the right size to facilitate your current and future business operations.
7 Post-Office Relocation “Growing Pains” To Avoid
An office relocation can be quite exciting, especially for a company going through an expansion or just taking the next step to being a bigger player in its marketplace. But with growth comes various types of “growing pains” – some involving the productivity of employees, others relating to the existing physical and technical aspects of the actual office space. While there are many organizational management strategies in place to help the employees through an office expansion, very few businesses have a proactive strategy in place to deal with office space related issues…so I’d like to suggest a few.
First, if your organization is even thinking about going through office relocation, please take into consideration the following:
- Your company’s current and future business goals
- The physical and technological aspects a potential office space needs to have in order to best meet your current and future business goals
I can’t even count the number of companies that did not take the time to do the above but instead rushed into a relocation only to encounter one or more of the following problems:
- Insufficient office space to facilitate growth
- Insufficient electrical outlets and/or voltage for office equipment
- Noisy or disruptive heating/cooling system
- Telecommunications limited or not activated at new site
- Insufficient internet services available for business needs
- Lack of transportation options for staff to get to the new location
- Lack of parking available
All of the above could be avoided by simply taking a proactive approach to your relocation project. That is why over the next few blogs, I will outline more proactive strategies your relocation team can put into effect for each of the above problems even before your organization begins considering a new office space.
Watch for more blogs in the coming weeks!
Office Space Design – Your Secret Weapon to Attracting Ideal Candidates
It is no secret – the interview process between companies and candidates is actually a two-way process. Not only is the interviewing company aiming to hire “good fits” to join their team, but the potentially “good fits” are also deciding if the interviewing company is right them. What does this have to do with office space design? A lot, considering companies can increase the probability of hooking their ideal candidates through their office space design.
It is happening in Europe and in different parts of the United States – -Companies are revamping their office space design to fit the mentality (and thus attract the top talents) of the young and up and coming workforce, namely the Generation Y and Z populations.
What exactly does that mean?
It means companies looking to attract the top talents of the Generation Y and generation Z populations (i.e. those born after 1979) are creating office environments that encourage creativity, collaboration and meet tech savvy needs. For some companies, that means trading traditional high-walled cubicles for lower-walled ergonomic workstations clustered in small groups. For other companies, it means trading the traditional boardroom table and chairs of a meeting room for either soft leather couches and coffee tables to create a relaxed “living room” styled social area, or with high cafe tables and bar stools to create a “café” styled office space design–all to encourage collaboration and teamwork. Open ceilings and bright bold primary colours accent the new office space design to encourage the concept of “no limits” on creativity.
Besides being collaborative and creative, both Gen Y’ers and Gen Z’ers are very comfortable with technology. In fact, most are tech savvy. So, if companies want to hook their ideal candidates from these generations, they will need to consider adding additional usb and other connection ports throughout their office space design or add a tech –heavy social networking meeting areas so that people can connect their laptops, IPads/tablets or other technical devices while meeting with their colleagues or clients in person or online. This will become more and more of a need once the younger Generation Z population enters the work force.
So what about clear-walled offices and meeting areas? Will they become a thing of the past? I would suggest no because they will help meet one more need of the Gen Z’ers—the need to on occasion work alone and only collaborate with others through online methods.
References:
About.Com Legal Careers, Generation Y, http://legalcareers.about.com/od/practicetips/a/GenerationY.htm
Blogger, JuJu Blog Site, Characteristics of Generation Z, http://characteristicsofgenerationz-juju.blogspot.ca/
Corporate Space Planning & Relocation Advice 