See You at Work: New Orleans Employers Rethink the Office Environment

Employers in New Orleans hope that their investments in amenities such as beer taps and soda fountains (shown above at Forman Watkins & Krutz’s office at Place St. Charles) will entice workers to return to the office.

In the post-pandemic environment where employers are trying to navigate new work schedules, office tenants are focusing more on the finish and design of office space than they are the rents.

In New Orleans, we are seeing office tenants rethink the concept of office space altogether, and their employees are thinking differently about their individual offices as well. There has been a shift from the traditional office space of years past where one spends eight hours a day in a large private office with the door closed. The office has evolved into more of a social place.

Scott Graf, Corporate Realty

Companies want their employees to come back to the office and not to be fully remote. Many employees want to get out of their pajamas and come back to the office. But, getting them all to come back has proven to be the challenge. Companies are now enticing their employees with redesigned spaces that are more aesthetically pleasing and rich with amenities that allow for more social interactions and collaboration. Employees who work remotely a few days a week are coming to the office because they want that engagement with their colleagues.

Tenants are now less interested in refurbishing private offices and spend more, if not all, of their improvement dollars on front-facing spaces and communal areas. These include sleek cafés on a window wall with bountiful snacks, wide-open impactful reception areas, lounges with a well-stocked bar, multiple breakout rooms and comfortable areas for meeting with colleagues and clients.

“We are definitely seeing a trend to upgrade the common areas and amenities in the office space,” says Nita Liggio, licensed designer and owner of AGL Commercial Interiors, a design firm that handles space planning for many of the city’s office towers. “The break room used to be a back-of-house space, used only for lunch and coffee breaks. Now there is a desire to open it up and/or give it a more prominent location, such as the [front] window. In some cases, the break room becomes the ‘hub’ of the office.”

In most major markets in the Southeast, other than New Orleans, there is a much larger delta in pricing between competing office buildings. But at approximately $20 per square foot, New Orleans is an attractive and affordable market. In fact, the greater New Orleans office market occupancy level has remained fairly consistent for the past decade.

Corporate Realty produces both quarterly and annual reports that address rental and occupancy rates. In the recent 10th anniversary issue, the data showed that neither rates nor overall occupancy levels have changed much at all, with pricing in the downtown Central Business District (CBD) office buildings only varying by a few dollars per square foot. All things being equal, landlords often win new tenants because of the design and quality of the available space, and the space, amenities and aesthetic of the building as a whole.

Some recent buildouts in both downtown New Orleans and the primary business suburb of Metairie provide good examples of this. One of Louisiana’s largest healthcare providers leases several floors in a Class A office tower in the CBD, with a portion of one floor serving as a café for both the employees and their guests. The space looks and feels like a hip, new restaurant.

An adjacent Class A office tower is the new home to a law firm that created a bar that is part of their reception area. Not only is it a convenient space to brainstorm with colleagues over a beverage, but the area also serves as a convivial destination for Friday afternoon happy hours when people from offices throughout the building will convene in the space to unwind.

In Metairie, a specialty insurance provider is completely renovating a partial floor so that visitors immediately enter the company’s airy, café-like setting, designed by global architecture giant Gensler. Employee cubicles and offices are located behind a curved wall, allowing this wide-open space to provide an open and friendly first impression.

Amenities are also very important in this concept of the office as a social place. Tenants value variety in the services that are located nearby. In a city like New Orleans, where the importance on food cannot be stressed enough, this is especially true of food-and-beverage options, which are ideally located in the building or at least within close proximity. This facilitates quick group lunches as well as provides catering option for events.

Recently, a well-known downtown New Orleans deli relocated to an office tower food court, while a local cult-favorite coffeehouse opened a kiosk on the ground floor of another Class A office building.

While the national media has had negative coverage of the state of the office market following the past couple of pandemic-influenced years, we do not think that companies will cancel their office leases and pull out of buildings. We do believe that this new thinking toward the use of office space is only going to increase in significance.

People may still be spending some of their work hours on a video conference from their sofas and not in private offices, but there remains a need for office space, and these spaces must change to accommodate the expectations of the workforce.

— By Scott Graf, CCIM, Sales and Leasing Associate, Corporate Realty. This article originally appeared in the October 2022 issue of Southeast Real Estate Business.

Content Partners
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