By Lawrence R. Armstrong, CEO, Ware Malcomb
For commercial real estate developers and corporate real estate professionals, delivering buildings that ensure long-term real estate value is an important consideration. Buildings can and should naturally adapt to a maturing real estate market if they are designed to do so.
Some key steps down this path include the following:
- Hire experienced commercial real estate brokers who specialize in your specific geographic market. Real estate is a local business and solutions that work in one region of the country, might fail in another. Set your deal up for success by working with a broker who has an in-depth understanding of your market.
- Work with your broker to determine the product type that will be most appropriate and marketable on a particular site.
- Understand the relevant tenant mix, in terms of size and function.
- What are the tenant sizes that are most prevalent in your market?
- Are there tenants of a certain size or type that are underserved?
- What are their functional requirements?
- How will your market mature over time?
- Can you design your project with enough flexibility to adapt to different tenant requirements in the future?
- Collaborate with an experienced commercial architect to develop a site plan that begins to address the above.
Thoughtful, strategic design can make a considerable difference in the long-term viability of your project. Choose a commercial architecture firm that specializes in the identified product type. The most important next step is a strong, well thought out site plan. As part of this process, an experienced architect will consider the following:
- Parameters given related to product type and special requirements.
- Appropriate pedestrian and vehicular access (automobile, truck, delivery and emergency.)
- Parking requirements/guidelines including ratios set by the city, as well as current market demands.
- Building divisibility (current and future potential), building depths, lengths & proportions, and structural bay depths.
- Required building and landscape setbacks.
Different building types require different physical considerations. It is worthwhile to understand current building use (for example, office, industrial, flex or distribution) as well as potential future use. By identifying these parameters early, you will create a well- designed building that will adapt through changing real estate cycles and design trends.
Appropriate pedestrian and vehicular access is very important to consider. For example, a corporate office campus comprised of multiple buildings might eventually be sold, and transitioned into several multi-tenant buildings. Will the pedestrian and vehicular access work effectively in either scenario? Can each building be sold, leased, or occupied separately with the appropriate lot size, frontage, access and parking?
Parking requirements are key to a building’s future marketability. However, many times an industrial building’s use will change. Parking requirements for a distribution building may be .5/1000, while a manufacturing building may be 2/1000. A multi-tenant flex industrial building might have a 3/1000 ratio for parking. If the building use changes, can the site adapt? Have these future changes been thought out and planned into the design?
Why is building divisibility important? Architects are continually challenged to maximize density. Planning now for both current and future divisibility gives the building owner flexibility and a wider market of potential future tenants.
You may be considering different building scenarios for an industrial project you are planning. Whether you are developing a 10,000-square-foot, a 100,000-square-foot or a 1 million-square-foot building, it is wise to design buildings that can be divided into two, three, or more tenant suites, thus expanding the range of possibility for prospective tenants.
A good example of a corporate office building is Pacific Life, a nine-story Class A office building Ware Malcomb designed for Pacific Life Insurance Company located in Aliso Viejo, California. Pacific Life wanted the building to be effective now and in the future, in the event it is sold and/or re-positioned as a multi-tenant building. In planning for potential future divisibility, Ware Malcomb designed the building bay depths to work well with Pacific Life’s office and workstation modules, but also to incorporate a future multi-tenant Z corridor and appropriate depths to accommodate multiple tenants per floor, each with desirable entry locations. This also minimizes the building rentable/usable load factor, which in turn maximizes rentable area.
A good example of corporate distribution centers are the projects Ware Malcomb is designing as part of the Panattoni Team for Whirlpool Corp. in multiple locations across the United States. Upon review the site plan exhibit, you will see that the two distribution buildings are designed for the end user, Whirlpool. On behalf of the developer Panattoni and the investor RREEF, they have also been designed to be marketable after the lease expires. The strategic building design allows for the buildings to be leased together, separately, or further divisible into a multi-tenant option. Ware Malcomb also designed the site to accommodate additional parking.
In life in general, it is a good rule to plan ahead. This is definitely true when designing commercial office and industrial developments. Thoughtful, strategic time up front can increase the value of your commercial real estate investment now and in the future.
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Lawrence R. Armstrong is CEO of Ware Malcomb, a national design firm which offers professional planning, architecture, interior and graphic design services to commercial development and corporate clients throughout North America.