When tenant declares bankruptcy, Bankruptcy Code §502(b)(6)'s cap on landlord's recoverable damages, although phrased in terms of rent, does not limit landlord solely to claims for rent reserved, but may support an additional claim for attorney's fees, so long as total claim is within the cap limits.
from DIRT, August 28, 2006
Landlord Wall Street was awarded a state court judgment for damages against lessee JSJF for breach of lease. Wall Street also prevailed on JSJF's counterclaim, obtaining a judgment of dismissal with attorney fees to be awarded later. A few days later, before the final entry of the order determining the attorney's fees, JSJF filed its Chapter 11 petition; Wall Street was its primary unsecured creditor.
Wall Street Plaza, LLC v JSJF Corp. (In re JSJF Corp.) 344 B.R. 94 (9th Cir. BAP 2006)
Wall Street filed three proofs of claim to which JSJF objected on various ground. One of the objections was that the claims for attorney fees, not rent reserved under 11 USC §502(b)(6), and that two were time-barred. The bankruptcy court disallowed all three claims and denied Wall Street's motion for reconsideration. When the state court ascertained the amount of the attorney fee award, Wall Street sought leave to file a fourth proof of claim, either as an amendment to the first timely claim or as late filed, which the bankruptcy court denied.
It also denied Wall Street's motion for reconsideration.
The 9th Circuit BAP held that the bankruptcy court's disallowance of the first claim because it was not for rent was an error of law. In re McSheridan (BAP 9th Cir 1995) 184 BR 91, 99, articulated a test to determine what charges are rent reserved and therefore capped under §502(b)(6).
As the court read this statute, it does not limit lessors' claims only to those items that fall within the cap. Thus, a lessor may have an uncapped claim for something other than damages resulting from the termination of the lease. The landlord's cap of §502(b)(6) may limit the amount of a lessor's claim, but it is not a criterion for its allowance; it becomes significant only if the claim otherwise allowable under nonbankruptcy law exceeds the cap calculated under the statute.
In the instant case, the landlord's claim for future rent was relatively small, and there was lots of room within the cap amount to support payment of some or all of the attorney's fee claim. In interpreting McSheridan in this way, the court appears to have departed from rulings by several other federal district court in California.
As the lower court had not based its opinion on the grounds that the landlord's claim exceeded the total allowable cap amount, but on the ground that the attorney's fees did not constitute rent, the court reversed and remanded for determination of whether the landlord's cap applied to some or all of the first claim under McSheridan and, if so, what that cap was.
The court further ruled that the trial court abused its discretion in disallowing the fourth claim as an amendment to the first claim. In the absence of prejudice to the opposing party, the Ninth Circuit has a liberal policy permitting amendments to a proof of claim to cure defects in the claim as filed.
The gravamen of the first claim was the assertion of all of Wall Street's rights vis-a-vis JSJF arising out of the lease litigation that resulted in the state court judgment. Because the total amount of attorney fees had not been determined, the amount stated in the claim was incorrect. The fourth claim corrected the error and set forth the proper amount of Wall Street's claim; it did not assert a new theory of relief. As to prejudice, nothing in JSJF's papers suggested any worsening of its position or bad faith or unreasonable delay on Wall Street's part. Prejudice requires more than simply having to litigate the merits of, or to pay, a claim, the mistaken legal premise on which the bankruptcy court denied the claim. There must be some legal detriment to the opposing party. The equities favored Wall Street because JSJF's own plan of reorganization included Wall Street's claim for lease damages. Indeed, Wall Street's successful assertion of these rights triggered JSJF's bankruptcy filing. The panel remanded for determination of the fourth claim and the extent to which it might be limited by the §502(b)(6) cap.
Note: The lease had designated the attorney's fee claim as rent"
but the trial court concluded that it was not rent because it was not regular and periodic and the appeals court did not disturb that finding.
It simply stated that the claim did not have to constitute rent to be payable as damages on account of the termination of the lease so long as there was room under the cap.
Comment from Roger Bernhardt Bernhard of the Golden Gate Law School in San Francisco.
It seems clear that a nonperiodic award of attorney fees entirely unrelated to the value of the premises is not rent, even when it is designated as such in the lease. The BAP here, however, read McSheridan to apply only to capping the recovery, and having nothing to do with allowability; attorney fees that do not constitute rent are merely not subject to the cap, they are not therefore disallowable.
Thus, one court [the bankruptcy court] read §502(b)(6) to deny the attorney fee claim entirely, while the other read it to permit it completely. It's not that I like compromises, but I don't know why the section wasn't construed to allow the attorney fee claim, even though it was not for rent, but to subject to the cap, even though it was still not for rent.
Section 506(b) provides that the court shall determine the amount of such claim ... and shall allow such claim in such amount except to the extent that ... 6) if such claim is the claim of a lessor for damages resulting from the termination of a lease of real property, such claim exceeds - A) the rent reserved by such lease ... for one year.
Thus, while one needs to determine what was rent reserved for capping purposes, what is capped is not that item, but rather the damages resulting from the termination of a lease. Damages resulting from termination seem to me to include related attorney fees, whether or not they are characterized as rent by the lease or by a court.
These attorney fees were awarded in an action brought by the lessor (1) for breach of the lease and for lost rent because the tenant abandoned, as well as (2) in defending against the tenant's cross-complaint for constructive eviction. All of that seems to perfectly qualify as damages resulting from the termination of a lease. If so, the syntax of the section seems to require their capping.
Comment from Patrick Randolph, University of Missouri, Kansas City, School of Law.
The court concluded that the attorney's fees did have to fit under the cap, but that there was room under the cap in this case because the claim for damages for breach of the lease - future rent - did not exceed the cap. e are not told what the term was, so we don't know whether the one year limit or the 15% limit applied; but the rent was $7,000 per month and the total claim for future rent was $80,000. So obviously there was some room for additional claims for attorney's fees." For more information see: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
Thursday, July 12, 2007
Friday, July 6, 2007
Hurricane Season Lessons
Lessons learned from last hurricane season.
From ALI-ABA CLE Review, August 25, 2006
"In the aftermath of 2005's tragic hurricane season, it became apparent that disaster preparedness needed improvement and thus spawned a wave of reflection on how better planning might have mollified the severe economic and human impact of the last year's hurricane season.
Those businesses that suffered the least during last year's hurricane season attribute their staying power in part to strong supply chain and logistical planning. Although no business can fully plan for defense against all contingent disasters, these minimal advance planning steps should be considered.
Establish a Disaster Team and Plan
In order to be better prepared for future disasters, companies must establish a Disaster Team and clearly identify its functions. This team should analyze your company's vulnerabilities and hazards, and develop a plan to respond to future catastrophes. Once developed, this plan should be distributed to management personnel and reviewed at least annually to make adjustments to allow for changes in your company's business model as well as to include lessons from most recent catastrophes elsewhere.
Elements of a Successful Emergency Management Plan
Critical elements include personnel training, clear communications procedures, life safety education and planning, security measures designed to protect work-product and property, and regular insurance evaluation to ensure maintenance of the most appropriate policies.
Develop and Maintain Proximate Business Locations
Prepare in advance to open or expand an office in the city physically closest to the disaster-impacted area.
Create and Implement Alternatives to Obtaining Supply and Satisfying Demand
Many businesses literally froze during last year's hurricane season and were unable to obtain necessary products and/or meet the increased (or ordinary) demands of their customers. Some, however, had established contingency plans and, although slowed, were relatively speaking able to continue business-as-usual.
Communication
Companies should establish and publish an Internet link or call-in telephone number for both employees and customers to call in another area code in the event of a disaster. Employees should be required to provide a landline telephone number of a relative or friend who is located out of state and who will know how that person may be reached after the disaster.
Computer Preparedness
If time permits, crucial hard files should be packed and carried out prior to the onset of the anticipated disaster. If time does not permit, consider boxing those files in locations away from windows. Ensure that your company's IT personnel maintain and update either modifications to the company's existing website and/or a new link with disaster updates and effective communications on how service providers can be reached and a timeline for the continued provision of services.
Adaptation
Maintain maximum flexibility, and adapt to unanticipated consequences after the disaster. Customers, clients, and even competitors, those directly impacted, and those less so, generally will understand and sympathize with your company's predicament and disaster-related challenges and working through those issues together may serve to strengthen the bond of trust." FOR MORE INFORMATION SEE: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
From ALI-ABA CLE Review, August 25, 2006
"In the aftermath of 2005's tragic hurricane season, it became apparent that disaster preparedness needed improvement and thus spawned a wave of reflection on how better planning might have mollified the severe economic and human impact of the last year's hurricane season.
Those businesses that suffered the least during last year's hurricane season attribute their staying power in part to strong supply chain and logistical planning. Although no business can fully plan for defense against all contingent disasters, these minimal advance planning steps should be considered.
Establish a Disaster Team and Plan
In order to be better prepared for future disasters, companies must establish a Disaster Team and clearly identify its functions. This team should analyze your company's vulnerabilities and hazards, and develop a plan to respond to future catastrophes. Once developed, this plan should be distributed to management personnel and reviewed at least annually to make adjustments to allow for changes in your company's business model as well as to include lessons from most recent catastrophes elsewhere.
Elements of a Successful Emergency Management Plan
Critical elements include personnel training, clear communications procedures, life safety education and planning, security measures designed to protect work-product and property, and regular insurance evaluation to ensure maintenance of the most appropriate policies.
Develop and Maintain Proximate Business Locations
Prepare in advance to open or expand an office in the city physically closest to the disaster-impacted area.
Create and Implement Alternatives to Obtaining Supply and Satisfying Demand
Many businesses literally froze during last year's hurricane season and were unable to obtain necessary products and/or meet the increased (or ordinary) demands of their customers. Some, however, had established contingency plans and, although slowed, were relatively speaking able to continue business-as-usual.
Communication
Companies should establish and publish an Internet link or call-in telephone number for both employees and customers to call in another area code in the event of a disaster. Employees should be required to provide a landline telephone number of a relative or friend who is located out of state and who will know how that person may be reached after the disaster.
Computer Preparedness
If time permits, crucial hard files should be packed and carried out prior to the onset of the anticipated disaster. If time does not permit, consider boxing those files in locations away from windows. Ensure that your company's IT personnel maintain and update either modifications to the company's existing website and/or a new link with disaster updates and effective communications on how service providers can be reached and a timeline for the continued provision of services.
Adaptation
Maintain maximum flexibility, and adapt to unanticipated consequences after the disaster. Customers, clients, and even competitors, those directly impacted, and those less so, generally will understand and sympathize with your company's predicament and disaster-related challenges and working through those issues together may serve to strengthen the bond of trust." FOR MORE INFORMATION SEE: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
RISING CONSTRUCTION CHARGES
Developers, distributors, contractors and subcontractors have suffered from horrendous increases in the cost of materials during the past few years.
from Sacramento Business Journal, August 25, 2006
"Although contractors absorbed the rising charges, driven mostly by global demand, when the trend began, they increasingly must pass the cost to the consumer or risk going down the tubes. That means tenants in office, industrial and retail space will often pay considerably more for the privilege of moving into new buildings.
One example of rents spiked by such costs is the four-story office building under construction by developer John Mourier in Highland Pointe business park, overlooking Highway 65 in Roseville. The new structure is the twin of a building finished at the beginning of this year. But it's not a twin in rents.
Almost entirely because of materials costs, rent in the new building will range from $2.50 to $2.60 per square foot, compared to $2.35 for the first building.
Another example is a 76,000-square-foot office building just completed in Vineyard Pointe Business Park in Roseville that has rents ranging 12 cents to 15 cents per square foot higher than its twin, which was finished in 2003. About 35% of the difference is the result of materials costs, and also rising municipal fees.
Sticker shock strikes twice
Material prices also are driving up tenant improvement costs for cubicles and the like. Builders have changed the way they negotiate those costs. In the past, landlords gave an allowance which was settled before the lease was signed. But the tenants didn't get cost estimates for the work from contractors until later. Because of rising materials costs, the sticker shock during the past 3 years could leave the tenants, stuck with the lease, to make up the difference between the allowance and the real costs.
Now some landlords are making sure the tenant improvement cost is known before the allowance is set and the lease signed.
Industrial building rent has also gone up, probably by at least 20% for new buildings, largely because of materials costs.
Some builders have decided to postpone construction until the market allows them to charge rents that warrant the increased construction cost. 9 out of 10 developers are saying lease rates have to go up.
The China Syndrome, Hollywood's 1979 nuclear-meltdown thriller, provides a handy label for one of the big reasons that materials costs have jumped. Builders in China, and similarly fast-growing economies elsewhere around the world, are voracious for ready-mix cement, steel, copper and other materials. We're in a global economy, competing with the whole world for materials.
From June 1999 through June 2003 materials rose 80%, to levels 613% higher than 1967 costs. In the 3 years from 2003 through this year, the rise was 131 points – 744% over 1967's costs. The combined cost of materials, labor and ancillary expenses charged by contractors to clients has increased very sharply during the past 3 years, reflecting a rise in demand for contractor services as well as hikes in materials costs. We had 20 years of annual 3-to-3.5% escalations in costs, and 2 years of about 20%, and now we're staring at 8-10% this year.
Among the materials typically thought of as construction related, the rising price of oil has dramatically increased the cost of plastics and asphalt, and has driven up the cost of transporting materials. Prices might slow their rise next year, and some items might even decline in cost. That's partly because China is increasing its own steel production. Also, some analysts say China probably can't maintain its current growth rate into next year.
Analysts also say the ebbing pace in U.S. home construction is easing materials prices. Also, more Mexican cement is expected in the U.S.
market, which should increase competition and lead to lower prices.
The hikes of the past few years have been so great that building will still be more expensive than in past years. And gas will still be $3 a gallon."
from Sacramento Business Journal, August 25, 2006
"Although contractors absorbed the rising charges, driven mostly by global demand, when the trend began, they increasingly must pass the cost to the consumer or risk going down the tubes. That means tenants in office, industrial and retail space will often pay considerably more for the privilege of moving into new buildings.
One example of rents spiked by such costs is the four-story office building under construction by developer John Mourier in Highland Pointe business park, overlooking Highway 65 in Roseville. The new structure is the twin of a building finished at the beginning of this year. But it's not a twin in rents.
Almost entirely because of materials costs, rent in the new building will range from $2.50 to $2.60 per square foot, compared to $2.35 for the first building.
Another example is a 76,000-square-foot office building just completed in Vineyard Pointe Business Park in Roseville that has rents ranging 12 cents to 15 cents per square foot higher than its twin, which was finished in 2003. About 35% of the difference is the result of materials costs, and also rising municipal fees.
Sticker shock strikes twice
Material prices also are driving up tenant improvement costs for cubicles and the like. Builders have changed the way they negotiate those costs. In the past, landlords gave an allowance which was settled before the lease was signed. But the tenants didn't get cost estimates for the work from contractors until later. Because of rising materials costs, the sticker shock during the past 3 years could leave the tenants, stuck with the lease, to make up the difference between the allowance and the real costs.
Now some landlords are making sure the tenant improvement cost is known before the allowance is set and the lease signed.
Industrial building rent has also gone up, probably by at least 20% for new buildings, largely because of materials costs.
Some builders have decided to postpone construction until the market allows them to charge rents that warrant the increased construction cost. 9 out of 10 developers are saying lease rates have to go up.
The China Syndrome, Hollywood's 1979 nuclear-meltdown thriller, provides a handy label for one of the big reasons that materials costs have jumped. Builders in China, and similarly fast-growing economies elsewhere around the world, are voracious for ready-mix cement, steel, copper and other materials. We're in a global economy, competing with the whole world for materials.
From June 1999 through June 2003 materials rose 80%, to levels 613% higher than 1967 costs. In the 3 years from 2003 through this year, the rise was 131 points – 744% over 1967's costs. The combined cost of materials, labor and ancillary expenses charged by contractors to clients has increased very sharply during the past 3 years, reflecting a rise in demand for contractor services as well as hikes in materials costs. We had 20 years of annual 3-to-3.5% escalations in costs, and 2 years of about 20%, and now we're staring at 8-10% this year.
Among the materials typically thought of as construction related, the rising price of oil has dramatically increased the cost of plastics and asphalt, and has driven up the cost of transporting materials. Prices might slow their rise next year, and some items might even decline in cost. That's partly because China is increasing its own steel production. Also, some analysts say China probably can't maintain its current growth rate into next year.
Analysts also say the ebbing pace in U.S. home construction is easing materials prices. Also, more Mexican cement is expected in the U.S.
market, which should increase competition and lead to lower prices.
The hikes of the past few years have been so great that building will still be more expensive than in past years. And gas will still be $3 a gallon."
Wednesday, June 27, 2007
New Life to Retail Leasing in Spring, Tx.
Steve & Barry leased a 56,000-square-foot space at the Corum Station Shopping Center at 4880 Louetta Road in Spring. Reportedly, Steve & Barry is one of the fastest growing retail companies in the nation and is known for affordable clothing. It currently owns and operates nearly 200 stores in 33 states. The Corum Station Shopping Center, built in 1985, is a 135,417-square-foot complex occupied by varying tenants and anchored by Sears Hardware Store. Jeff Beard and Diana Gaines of J. Beard Real Estate Co. LP represented the landlord, Stan Herman.
For more inforamtion see: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
For more inforamtion see: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
51,000 sq ft expansion in Clear Lake, Tx.
Jacobs Engineering executed a renewal/expansion for 51,204 square feet of office space at the 2222 Bay Area Blvd. in Houston. The firm now resides between two floors. Built in 1979, the property features card-key access and consists of a total 64,403 square feet. The building is now fully leased. Lou Cushman of Cushman & Wakefield represented Jacobs Engineering. Ace Schlameus and Laura Schlameus of Grubb & Ellis represented the landlord, Triyar of Texas.
For more information see: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
For more information see: www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
Tuesday, June 26, 2007
Aligning Real Estate and business goal
"The concept of aligning real estate and business goals is of paramount importance.
Since a corporation's cost of occupancy is its largest fixed operating cost, real estate alignment means two things:
(1) Driving down costs in existing facility operations,
and
(2) Planning ahead to minimize the initial costs for new
occupancy.
Space planning and the accurate growth projections, for instance, will do much to drive down and stabilize long-term real estate costs.
Alignment is like two parallel lines. If the lines illustrate the alignment between real estate and the business and the length of the lines illustrates time, then any small diversion in either the real estate or business direction today can create a huge gap three, five or seven years out.
Obviously, a failure to implement a good strategic plan will result in poor decision making. The more transactions made outside the context of the client's entire portfolio, the more poor decisions will be made and the more misaligned the client's portfolio will be in the future.
Corporate real estate managers need to check alignment frequently because it's easier to expand or contract incrementally than it is to sublease or otherwise dispose of excess space. On the flip side, you lose any leverage if you're forced into decisions during expansion.
Often, CRE managers will lease space reactively and end up wildly misaligned especially in de-centralized environments. One client I worked with underwent several mergers and found themselves with eight leases of varying sizes in one relatively small city. They knew of their problem but they didn't know how to relate. See www.houstonrealtyadvisors.net
Since a corporation's cost of occupancy is its largest fixed operating cost, real estate alignment means two things:
(1) Driving down costs in existing facility operations,
and
(2) Planning ahead to minimize the initial costs for new
occupancy.
Space planning and the accurate growth projections, for instance, will do much to drive down and stabilize long-term real estate costs.
Alignment is like two parallel lines. If the lines illustrate the alignment between real estate and the business and the length of the lines illustrates time, then any small diversion in either the real estate or business direction today can create a huge gap three, five or seven years out.
Obviously, a failure to implement a good strategic plan will result in poor decision making. The more transactions made outside the context of the client's entire portfolio, the more poor decisions will be made and the more misaligned the client's portfolio will be in the future.
Corporate real estate managers need to check alignment frequently because it's easier to expand or contract incrementally than it is to sublease or otherwise dispose of excess space. On the flip side, you lose any leverage if you're forced into decisions during expansion.
Often, CRE managers will lease space reactively and end up wildly misaligned especially in de-centralized environments. One client I worked with underwent several mergers and found themselves with eight leases of varying sizes in one relatively small city. They knew of their problem but they didn't know how to relate. See www.houstonrealtyadvisors.net
Office of the Future
The office of the future will be liberated from endless rows of gray cubicles, hard-walled conference rooms and bleak break areas.
from The Triangle Business Journal - August 18, 2006
"New, more mobile technology and a push for increased personal interaction are redesigning the office. There's so much emphasis now on communication. People are going to work in offices where they see people face to face, so there's going to be less of an emphasis on walled offices.
It's not surprising that many of the changes in office look and feel are related to the wants and needs of a younger work force. This generation under 30 is into entitlements. They want to work in an environment that's friendly.
Increased mobility and a growing trend toward telecommuting has put the traditional office in a precarious position. Companies have to compete with home offices. Businesses need to provide an enticing environment if they hope to make people want to spend time in the office.
In this new environment, even traditional office furniture is not as important as it once was. It's all about change and mobility. Instead of stationary desks that tend to isolate workers into separate work spaces, teams of employees often will gather around tables. They don't want to move furniture. They want to move people.
Some theorize that workers who are mobile feel less isolated and are better able to exchange ideas. People are creating lots of spaces for conferencing opportunities spread throughout the office - everything from bar-height stools to easy chairs.
In an era where some younger workers are more productive working on their laptops at a nearby Starbucks, newer office designs can include open cafes, lounge areas and smaller comfort areas for quick meetings.
Companies are competing for employees like never before. Those that can implement these changes are better at attracting and retaining employees.
But it's not just tech companies - which historically have attracted young, free-thinking workers - that have begun remaking the office. It's across the board. Tech companies drove the trends of funky work environments. But we're seeing all industries, even companies like Bank of America and RBC Centura, using a cutting edge approach."
Tear down the walls.
The first step in transforming today's workplace into the office of the future is to rethink the use of space based on what tasks need to be done and by whom. It's not who you are but what you do and what it takes to do your job well.
It is a breaking down of hierarchical space. Large office suites that traditionally were reserved for executives take up a lot of floor space.
The placement of these executive work spaces also is changing.
Historically, walled offices were built along the perimeter of each floor of an office building, so that executives got the benefit of having windows while the rest of the employees had to toil under fluorescent lights. But now, a growing trend is to move executive offices into the center of the room and put employee workstations along the perimeter to take advantage of natural light.
And while the ubiquitous cubicle is expected to remain a fixture in future offices, its basic design is changing. Cubicles are getting shorter. The lower walls are high enough to give you voice privacy but low enough to give you all-around visibility. The growing use of laptops and flat-screen monitors in the workplace also means that cubicles don't have to be as large - or as tall - as they once were.
The importance of office design on worker productivity was dramatically underscored by an online survey conducted by Gensler, a leading architecture and design firm with 28 offices around the globe. The results of the Gensler 2006 U.S. Workplace Survey showed that of the random sample of 2,013 office workers in all staff and management strata in the U.S., the most common complaints about today's office include a lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design.
Nearly 90% of senior executives surveyed believe that a better physical working environment would have a positive impact on their company's bottom line, and that their companies would be able to perform an average of 22% more work if their office environments were better designed. Furthermore, two-thirds of office workers believe they are more efficient when they work closely with co-workers.
Yet 30% said they don't think their current workplace promotes spontaneous interaction or collaboration among colleagues.
And as for the way corporate executives work, 62% said they have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
Turning up the heat
Sustainability issues and the trend toward environmentally friendly, or green designs, are helping to reduce energy costs while improving employees' comfort and health. One innovation could bring a peaceful solution to the office thermostat wars. Access flooring, basically a raised floor under which cabling is run, also can accommodate pared-down HVAC duct work so that employees can control temperatures at their own workstations. Typically, heated or cooled air in an office is forced out of ceiling vents. But getting the right temperature air down to a seated employee - normally four feet above the floor - requires more energy, both in heating or cooling the air and blowing it down from the ceiling.
Individual floor vents require less energy and provide a greater comfort level. Newer buildings are starting to take advantage of natural light by using larger windows and more of them."
For more information see: please call 713 782-0260
The office of the future will be liberated from endless rows of gray cubicles, hard-walled conference rooms and bleak break areas.
from The Triangle Business Journal - August 18, 2006
"New, more mobile technology and a push for increased personal interaction are redesigning the office. There's so much emphasis now on communication. People are going to work in offices where they see people face to face, so there's going to be less of an emphasis on walled offices.
It's not surprising that many of the changes in office look and feel are related to the wants and needs of a younger work force. This generation under 30 is into entitlements. They want to work in an environment that's friendly.
Increased mobility and a growing trend toward telecommuting has put the traditional office in a precarious position. Companies have to compete with home offices. Businesses need to provide an enticing environment if they hope to make people want to spend time in the office.
In this new environment, even traditional office furniture is not as important as it once was. It's all about change and mobility. Instead of stationary desks that tend to isolate workers into separate work spaces, teams of employees often will gather around tables. They don't want to move furniture. They want to move people.
Some theorize that workers who are mobile feel less isolated and are better able to exchange ideas. People are creating lots of spaces for conferencing opportunities spread throughout the office - everything from bar-height stools to easy chairs.
In an era where some younger workers are more productive working on their laptops at a nearby Starbucks, newer office designs can include open cafes, lounge areas and smaller comfort areas for quick meetings.
Companies are competing for employees like never before. Those that can implement these changes are better at attracting and retaining employees.
But it's not just tech companies - which historically have attracted young, free-thinking workers - that have begun remaking the office. It's across the board. Tech companies drove the trends of funky work environments. But we're seeing all industries, even companies like Bank of America and RBC Centura, using a cutting edge approach."
Tear down the walls.
The first step in transforming today's workplace into the office of the future is to rethink the use of space based on what tasks need to be done and by whom. It's not who you are but what you do and what it takes to do your job well.
It is a breaking down of hierarchical space. Large office suites that traditionally were reserved for executives take up a lot of floor space.
The placement of these executive work spaces also is changing.
Historically, walled offices were built along the perimeter of each floor of an office building, so that executives got the benefit of having windows while the rest of the employees had to toil under fluorescent lights. But now, a growing trend is to move executive offices into the center of the room and put employee workstations along the perimeter to take advantage of natural light.
And while the ubiquitous cubicle is expected to remain a fixture in future offices, its basic design is changing. Cubicles are getting shorter. The lower walls are high enough to give you voice privacy but low enough to give you all-around visibility. The growing use of laptops and flat-screen monitors in the workplace also means that cubicles don't have to be as large - or as tall - as they once were.
The importance of office design on worker productivity was dramatically underscored by an online survey conducted by Gensler, a leading architecture and design firm with 28 offices around the globe. The results of the Gensler 2006 U.S. Workplace Survey showed that of the random sample of 2,013 office workers in all staff and management strata in the U.S., the most common complaints about today's office include a lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design.
Nearly 90% of senior executives surveyed believe that a better physical working environment would have a positive impact on their company's bottom line, and that their companies would be able to perform an average of 22% more work if their office environments were better designed. Furthermore, two-thirds of office workers believe they are more efficient when they work closely with co-workers.
Yet 30% said they don't think their current workplace promotes spontaneous interaction or collaboration among colleagues.
And as for the way corporate executives work, 62% said they have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
Turning up the heat
Sustainability issues and the trend toward environmentally friendly, or green designs, are helping to reduce energy costs while improving employees' comfort and health. One innovation could bring a peaceful solution to the office thermostat wars. Access flooring, basically a raised floor under which cabling is run, also can accommodate pared-down HVAC duct work so that employees can control temperatures at their own workstations. Typically, heated or cooled air in an office is forced out of ceiling vents. But getting the right temperature air down to a seated employee - normally four feet above the floor - requires more energy, both in heating or cooling the air and blowing it down from the ceiling.
Individual floor vents require less energy and provide a greater comfort level. Newer buildings are starting to take advantage of natural light by using larger windows and more of them."
The office of the future will be liberated from endless rows of gray cubicles, hard-walled conference rooms and bleak break areas.
from The Triangle Business Journal - August 18, 2006
"New, more mobile technology and a push for increased personal interaction are redesigning the office. There's so much emphasis now on communication. People are going to work in offices where they see people face to face, so there's going to be less of an emphasis on walled offices.
It's not surprising that many of the changes in office look and feel are related to the wants and needs of a younger work force. This generation under 30 is into entitlements. They want to work in an environment that's friendly.
Increased mobility and a growing trend toward telecommuting has put the traditional office in a precarious position. Companies have to compete with home offices. Businesses need to provide an enticing environment if they hope to make people want to spend time in the office.
In this new environment, even traditional office furniture is not as important as it once was. It's all about change and mobility. Instead of stationary desks that tend to isolate workers into separate work spaces, teams of employees often will gather around tables. They don't want to move furniture. They want to move people.
Some theorize that workers who are mobile feel less isolated and are better able to exchange ideas. People are creating lots of spaces for conferencing opportunities spread throughout the office - everything from bar-height stools to easy chairs.
In an era where some younger workers are more productive working on their laptops at a nearby Starbucks, newer office designs can include open cafes, lounge areas and smaller comfort areas for quick meetings.
Companies are competing for employees like never before. Those that can implement these changes are better at attracting and retaining employees.
But it's not just tech companies - which historically have attracted young, free-thinking workers - that have begun remaking the office. It's across the board. Tech companies drove the trends of funky work environments. But we're seeing all industries, even companies like Bank of America and RBC Centura, using a cutting edge approach."
Tear down the walls.
The first step in transforming today's workplace into the office of the future is to rethink the use of space based on what tasks need to be done and by whom. It's not who you are but what you do and what it takes to do your job well.
It is a breaking down of hierarchical space. Large office suites that traditionally were reserved for executives take up a lot of floor space.
The placement of these executive work spaces also is changing.
Historically, walled offices were built along the perimeter of each floor of an office building, so that executives got the benefit of having windows while the rest of the employees had to toil under fluorescent lights. But now, a growing trend is to move executive offices into the center of the room and put employee workstations along the perimeter to take advantage of natural light.
And while the ubiquitous cubicle is expected to remain a fixture in future offices, its basic design is changing. Cubicles are getting shorter. The lower walls are high enough to give you voice privacy but low enough to give you all-around visibility. The growing use of laptops and flat-screen monitors in the workplace also means that cubicles don't have to be as large - or as tall - as they once were.
The importance of office design on worker productivity was dramatically underscored by an online survey conducted by Gensler, a leading architecture and design firm with 28 offices around the globe. The results of the Gensler 2006 U.S. Workplace Survey showed that of the random sample of 2,013 office workers in all staff and management strata in the U.S., the most common complaints about today's office include a lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design.
Nearly 90% of senior executives surveyed believe that a better physical working environment would have a positive impact on their company's bottom line, and that their companies would be able to perform an average of 22% more work if their office environments were better designed. Furthermore, two-thirds of office workers believe they are more efficient when they work closely with co-workers.
Yet 30% said they don't think their current workplace promotes spontaneous interaction or collaboration among colleagues.
And as for the way corporate executives work, 62% said they have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
Turning up the heat
Sustainability issues and the trend toward environmentally friendly, or green designs, are helping to reduce energy costs while improving employees' comfort and health. One innovation could bring a peaceful solution to the office thermostat wars. Access flooring, basically a raised floor under which cabling is run, also can accommodate pared-down HVAC duct work so that employees can control temperatures at their own workstations. Typically, heated or cooled air in an office is forced out of ceiling vents. But getting the right temperature air down to a seated employee - normally four feet above the floor - requires more energy, both in heating or cooling the air and blowing it down from the ceiling.
Individual floor vents require less energy and provide a greater comfort level. Newer buildings are starting to take advantage of natural light by using larger windows and more of them."
see www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
from The Triangle Business Journal - August 18, 2006
"New, more mobile technology and a push for increased personal interaction are redesigning the office. There's so much emphasis now on communication. People are going to work in offices where they see people face to face, so there's going to be less of an emphasis on walled offices.
It's not surprising that many of the changes in office look and feel are related to the wants and needs of a younger work force. This generation under 30 is into entitlements. They want to work in an environment that's friendly.
Increased mobility and a growing trend toward telecommuting has put the traditional office in a precarious position. Companies have to compete with home offices. Businesses need to provide an enticing environment if they hope to make people want to spend time in the office.
In this new environment, even traditional office furniture is not as important as it once was. It's all about change and mobility. Instead of stationary desks that tend to isolate workers into separate work spaces, teams of employees often will gather around tables. They don't want to move furniture. They want to move people.
Some theorize that workers who are mobile feel less isolated and are better able to exchange ideas. People are creating lots of spaces for conferencing opportunities spread throughout the office - everything from bar-height stools to easy chairs.
In an era where some younger workers are more productive working on their laptops at a nearby Starbucks, newer office designs can include open cafes, lounge areas and smaller comfort areas for quick meetings.
Companies are competing for employees like never before. Those that can implement these changes are better at attracting and retaining employees.
But it's not just tech companies - which historically have attracted young, free-thinking workers - that have begun remaking the office. It's across the board. Tech companies drove the trends of funky work environments. But we're seeing all industries, even companies like Bank of America and RBC Centura, using a cutting edge approach."
Tear down the walls.
The first step in transforming today's workplace into the office of the future is to rethink the use of space based on what tasks need to be done and by whom. It's not who you are but what you do and what it takes to do your job well.
It is a breaking down of hierarchical space. Large office suites that traditionally were reserved for executives take up a lot of floor space.
The placement of these executive work spaces also is changing.
Historically, walled offices were built along the perimeter of each floor of an office building, so that executives got the benefit of having windows while the rest of the employees had to toil under fluorescent lights. But now, a growing trend is to move executive offices into the center of the room and put employee workstations along the perimeter to take advantage of natural light.
And while the ubiquitous cubicle is expected to remain a fixture in future offices, its basic design is changing. Cubicles are getting shorter. The lower walls are high enough to give you voice privacy but low enough to give you all-around visibility. The growing use of laptops and flat-screen monitors in the workplace also means that cubicles don't have to be as large - or as tall - as they once were.
The importance of office design on worker productivity was dramatically underscored by an online survey conducted by Gensler, a leading architecture and design firm with 28 offices around the globe. The results of the Gensler 2006 U.S. Workplace Survey showed that of the random sample of 2,013 office workers in all staff and management strata in the U.S., the most common complaints about today's office include a lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design.
Nearly 90% of senior executives surveyed believe that a better physical working environment would have a positive impact on their company's bottom line, and that their companies would be able to perform an average of 22% more work if their office environments were better designed. Furthermore, two-thirds of office workers believe they are more efficient when they work closely with co-workers.
Yet 30% said they don't think their current workplace promotes spontaneous interaction or collaboration among colleagues.
And as for the way corporate executives work, 62% said they have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
Turning up the heat
Sustainability issues and the trend toward environmentally friendly, or green designs, are helping to reduce energy costs while improving employees' comfort and health. One innovation could bring a peaceful solution to the office thermostat wars. Access flooring, basically a raised floor under which cabling is run, also can accommodate pared-down HVAC duct work so that employees can control temperatures at their own workstations. Typically, heated or cooled air in an office is forced out of ceiling vents. But getting the right temperature air down to a seated employee - normally four feet above the floor - requires more energy, both in heating or cooling the air and blowing it down from the ceiling.
Individual floor vents require less energy and provide a greater comfort level. Newer buildings are starting to take advantage of natural light by using larger windows and more of them."
For more information see: please call 713 782-0260
The office of the future will be liberated from endless rows of gray cubicles, hard-walled conference rooms and bleak break areas.
from The Triangle Business Journal - August 18, 2006
"New, more mobile technology and a push for increased personal interaction are redesigning the office. There's so much emphasis now on communication. People are going to work in offices where they see people face to face, so there's going to be less of an emphasis on walled offices.
It's not surprising that many of the changes in office look and feel are related to the wants and needs of a younger work force. This generation under 30 is into entitlements. They want to work in an environment that's friendly.
Increased mobility and a growing trend toward telecommuting has put the traditional office in a precarious position. Companies have to compete with home offices. Businesses need to provide an enticing environment if they hope to make people want to spend time in the office.
In this new environment, even traditional office furniture is not as important as it once was. It's all about change and mobility. Instead of stationary desks that tend to isolate workers into separate work spaces, teams of employees often will gather around tables. They don't want to move furniture. They want to move people.
Some theorize that workers who are mobile feel less isolated and are better able to exchange ideas. People are creating lots of spaces for conferencing opportunities spread throughout the office - everything from bar-height stools to easy chairs.
In an era where some younger workers are more productive working on their laptops at a nearby Starbucks, newer office designs can include open cafes, lounge areas and smaller comfort areas for quick meetings.
Companies are competing for employees like never before. Those that can implement these changes are better at attracting and retaining employees.
But it's not just tech companies - which historically have attracted young, free-thinking workers - that have begun remaking the office. It's across the board. Tech companies drove the trends of funky work environments. But we're seeing all industries, even companies like Bank of America and RBC Centura, using a cutting edge approach."
Tear down the walls.
The first step in transforming today's workplace into the office of the future is to rethink the use of space based on what tasks need to be done and by whom. It's not who you are but what you do and what it takes to do your job well.
It is a breaking down of hierarchical space. Large office suites that traditionally were reserved for executives take up a lot of floor space.
The placement of these executive work spaces also is changing.
Historically, walled offices were built along the perimeter of each floor of an office building, so that executives got the benefit of having windows while the rest of the employees had to toil under fluorescent lights. But now, a growing trend is to move executive offices into the center of the room and put employee workstations along the perimeter to take advantage of natural light.
And while the ubiquitous cubicle is expected to remain a fixture in future offices, its basic design is changing. Cubicles are getting shorter. The lower walls are high enough to give you voice privacy but low enough to give you all-around visibility. The growing use of laptops and flat-screen monitors in the workplace also means that cubicles don't have to be as large - or as tall - as they once were.
The importance of office design on worker productivity was dramatically underscored by an online survey conducted by Gensler, a leading architecture and design firm with 28 offices around the globe. The results of the Gensler 2006 U.S. Workplace Survey showed that of the random sample of 2,013 office workers in all staff and management strata in the U.S., the most common complaints about today's office include a lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design.
Nearly 90% of senior executives surveyed believe that a better physical working environment would have a positive impact on their company's bottom line, and that their companies would be able to perform an average of 22% more work if their office environments were better designed. Furthermore, two-thirds of office workers believe they are more efficient when they work closely with co-workers.
Yet 30% said they don't think their current workplace promotes spontaneous interaction or collaboration among colleagues.
And as for the way corporate executives work, 62% said they have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
Turning up the heat
Sustainability issues and the trend toward environmentally friendly, or green designs, are helping to reduce energy costs while improving employees' comfort and health. One innovation could bring a peaceful solution to the office thermostat wars. Access flooring, basically a raised floor under which cabling is run, also can accommodate pared-down HVAC duct work so that employees can control temperatures at their own workstations. Typically, heated or cooled air in an office is forced out of ceiling vents. But getting the right temperature air down to a seated employee - normally four feet above the floor - requires more energy, both in heating or cooling the air and blowing it down from the ceiling.
Individual floor vents require less energy and provide a greater comfort level. Newer buildings are starting to take advantage of natural light by using larger windows and more of them."
The office of the future will be liberated from endless rows of gray cubicles, hard-walled conference rooms and bleak break areas.
from The Triangle Business Journal - August 18, 2006
"New, more mobile technology and a push for increased personal interaction are redesigning the office. There's so much emphasis now on communication. People are going to work in offices where they see people face to face, so there's going to be less of an emphasis on walled offices.
It's not surprising that many of the changes in office look and feel are related to the wants and needs of a younger work force. This generation under 30 is into entitlements. They want to work in an environment that's friendly.
Increased mobility and a growing trend toward telecommuting has put the traditional office in a precarious position. Companies have to compete with home offices. Businesses need to provide an enticing environment if they hope to make people want to spend time in the office.
In this new environment, even traditional office furniture is not as important as it once was. It's all about change and mobility. Instead of stationary desks that tend to isolate workers into separate work spaces, teams of employees often will gather around tables. They don't want to move furniture. They want to move people.
Some theorize that workers who are mobile feel less isolated and are better able to exchange ideas. People are creating lots of spaces for conferencing opportunities spread throughout the office - everything from bar-height stools to easy chairs.
In an era where some younger workers are more productive working on their laptops at a nearby Starbucks, newer office designs can include open cafes, lounge areas and smaller comfort areas for quick meetings.
Companies are competing for employees like never before. Those that can implement these changes are better at attracting and retaining employees.
But it's not just tech companies - which historically have attracted young, free-thinking workers - that have begun remaking the office. It's across the board. Tech companies drove the trends of funky work environments. But we're seeing all industries, even companies like Bank of America and RBC Centura, using a cutting edge approach."
Tear down the walls.
The first step in transforming today's workplace into the office of the future is to rethink the use of space based on what tasks need to be done and by whom. It's not who you are but what you do and what it takes to do your job well.
It is a breaking down of hierarchical space. Large office suites that traditionally were reserved for executives take up a lot of floor space.
The placement of these executive work spaces also is changing.
Historically, walled offices were built along the perimeter of each floor of an office building, so that executives got the benefit of having windows while the rest of the employees had to toil under fluorescent lights. But now, a growing trend is to move executive offices into the center of the room and put employee workstations along the perimeter to take advantage of natural light.
And while the ubiquitous cubicle is expected to remain a fixture in future offices, its basic design is changing. Cubicles are getting shorter. The lower walls are high enough to give you voice privacy but low enough to give you all-around visibility. The growing use of laptops and flat-screen monitors in the workplace also means that cubicles don't have to be as large - or as tall - as they once were.
The importance of office design on worker productivity was dramatically underscored by an online survey conducted by Gensler, a leading architecture and design firm with 28 offices around the globe. The results of the Gensler 2006 U.S. Workplace Survey showed that of the random sample of 2,013 office workers in all staff and management strata in the U.S., the most common complaints about today's office include a lack of space, too few quiet areas, uncomfortable workstations, and bad layout and design.
Nearly 90% of senior executives surveyed believe that a better physical working environment would have a positive impact on their company's bottom line, and that their companies would be able to perform an average of 22% more work if their office environments were better designed. Furthermore, two-thirds of office workers believe they are more efficient when they work closely with co-workers.
Yet 30% said they don't think their current workplace promotes spontaneous interaction or collaboration among colleagues.
And as for the way corporate executives work, 62% said they have great respect for leaders who work in an open plan environment with their teams rather than in private offices.
Turning up the heat
Sustainability issues and the trend toward environmentally friendly, or green designs, are helping to reduce energy costs while improving employees' comfort and health. One innovation could bring a peaceful solution to the office thermostat wars. Access flooring, basically a raised floor under which cabling is run, also can accommodate pared-down HVAC duct work so that employees can control temperatures at their own workstations. Typically, heated or cooled air in an office is forced out of ceiling vents. But getting the right temperature air down to a seated employee - normally four feet above the floor - requires more energy, both in heating or cooling the air and blowing it down from the ceiling.
Individual floor vents require less energy and provide a greater comfort level. Newer buildings are starting to take advantage of natural light by using larger windows and more of them."
see www.houstonrealtyadvisors.net
or www.houstonrealtyadvisor.com
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