Colliers Capital Markets recently sat down with Tim Betjemann, Geographic Discipline Leader, Colliers Project Leaders, to discuss innovations in workplace design and build-out construction trends.  

Colliers Capital Markets (CCM): What are companies doing with their space today?   

Tim Betjemann (TB):  Companies are giving people a reason to come back to the office. They are using their space to provide a better experience than you get at home by supporting a sense of community through shared social spaces and task-focused work environments. The Zoom rooms and conference spaces we’re building today have best-in-class technology and acoustics. It used to be that only a handful of rooms were designed for video conferencing. Today, every space, including workstations, is designed to support video calls.

Let’s say you’re part of a critical pitch. Chances are you’d rather be in an impressive conference space with a robust internet connection and IT assistance than in a poorly lit home office with a virtual background, laggy connection, and the neighbors’ landscapers outside your window. 

CCM: What are some of the biggest changes you are seeing in office build-outs today, compared to pre-pandemic? 

TB:  The office has changed significantly over the last four years. However, the way users budget and schedule for it hasn’t necessarily caught up. The types and proportions of today’s workspaces are dramatically different. Gone are the days of acres of relatively low-cost cube farms for heads-down work. Those tasks are now done efficiently at home. The spaces constructed today are for collaboration, either locally or via video conferencing. Conference rooms, huddle rooms, and breakout areas constitute a greater percentage of the overall office environment. These enhancements come at a higher cost per square foot than the workspaces of yesterday. So, although companies are reducing their footprints, today’s office build-outs are more expensive, and overall budgets aren’t going down the way one might expect.

CCM: How are occupiers balancing higher build-out costs?

TB: The softening real estate market has helped provide funding mechanisms like tenant improvement allowances and free rent, which have helped offset build-out costs. Additionally, we’re seeing occupiers adopt a strategic approach by reimagining second-generation and sublease spaces. For example, by repurposing open and private offices, occupiers can redirect funds to higher-cost spaces like conference rooms, cafes, and other dynamic areas that bring people back to the office.  

CCM: Are you still seeing residual delays with some products or materials, or are the days of supply bottlenecks gone?

TB: Many supply chain bottlenecks have been resolved, with IT, AV, and security equipment improving significantly. However, electrical systems can still have very long lead times. Purchasing long lead items during design can help with mitigating schedule risk. I would still caution that regular check-ins with contractors and vendors are crucial because supply chain risk can come from almost anywhere. Recently, there were some significant delays in materials coming from overseas as shipping was rerouted due to pirate activity.

*This interview has been edited for length and clarity.