Corporate decisions over office space in 2014 start with debates over competing interests: Millennials versus Baby Boomers, downtown versus the suburbs, private offices versus collaborative spaces.
One of the biggest uncertainties is gauging the permanence of changes brought on by Millennials, who will comprise 50 percent of the workforce by 2020. While the demographic is credited for the resurgence of cities as preferred work and living spaces, it’s likely they’ll follow previous generations to the suburbs when they hit child-rearing age, predicts Ben Breslau, a managing director at commercial real estate brokerage JLL.
"People assume they’re going to live in the city, but it’s only a matter of time before they need schools and they need space," Breslau said.
Breslau spoke Wednesday at a JLL forum on trends in commercial real estate held at Boston’s Institute of Contemporary Art.
Tech companies such as Google and Facebook, where the average employee is under 30, pay some of the highest rents in coastal markets and have pioneered the drastic redesign of office space with open floor plans and perks like indoor putting greens and climbing walls. But some studies have traced declining productivity to open offices, and companies that have embraced the new workspace layouts are having second thoughts.
"We’re starting to have clients come back to us and tell us, `It was at the peril of our culture and our productivity.’ Productivity has come down in some of these spaces because people are packed so tightly together," Breslau said. "It might be that we’re just not used to it. Everybody’s wearing noise-cancelling headphones or listening to music because it’s the only way they can get work done."
Countering the Millennial surge is the aging U.S. workforce with an average age of 42. Predictably, divides in workspace preferences break down along generational lines: Millennials overwhelmingly favor an engaging environment, while Baby Boomers are most concerned with "acoustic privacy."
JLL CEO Colin Dyer said the real estate industry is still trying to find the right formula.
"We see corporate real estate executives around the world excited but also frightened," Dyer said. "They can see the model of what’s supposed to work for the Millennials. They understand how that attracts the talent progressive companies around the world need and they know how to do it. But they’ve got an awful lot of internal resistance."
At JLL, Dyer said, the fiercest opposition comes from brokers.
"They don’t want to give up their offices," he said.
