Call it the incredible shrinking workplace: New York’s sputtering economy is pushing companies to design offices that are extremely cost-effective, making the most out of every inch of space. As a result, white-collar professionals are working in tighter quarters.
While the allotment of office space per worker has been shrinking for some time, in the last year the average space allocation dipped significantly, to 100 square feet per person in the New York market, compared to about 120 square feet in 2007, according to CoreNet Global, a nonprofit that tracks trends in real estate.
With the Big Apple leading the country in asking rents for Class A office space — $85 per square foot on average — it makes sense for companies to scrutinize how they use their space. Architects report seeing more requests for shared workstations, re-use of a previous tenant’s fixtures and less expensive materials.
Some firms are taking into account how much time employees actually spend in the office and how much time they’re at their desks, said Richard Kadzis, an industry analyst for CoreNet. Firms across many industries are designing offices to be efficient and flexible, he said.
“Space utilization is a very smart thing for companies to be doing,” he said. “In a downturn, they can save a lot of money.”
New York architects said they’re seeing firms lease smaller offices and demand layouts with cost-saving features. For example, new offices feature open workstations that can be shared by more than one worker, which can cut down on the quantity of furniture required for the space. Closed-door offices are equipped with extra electrical outlets to accommodate two or more workers. While some offices have small conference rooms, others forego closed doors altogether. Instead, they opt for open areas with comfortable seating that can work for informal meetings or even work areas for employees with laptops.
Nasdaq eliminated most conference rooms when it remodeled its 65,000-square-foot office at One Liberty Plaza earlier this year, said Marc Spector, a principal with the Spector Group, an architecture firm specializing in commercial projects, which designed the space. “We’re seeing conference rooms disappear,” Spector said.
Smaller layouts can function perfectly well when natural light and other amenities are put into place to make up for the limited space, he said.
The National Audubon Society’s sunny new office at 225 Varick Street is
a little more than half the size of its former offices in the historic building the organization used to own at 700 Broadway in Greenwich Village. The nonprofit no longer needed so much space. Over the years, the number of staff working at its New York headquarters had declined as the group adopted a decentralized approach to operations.
Its new 28,000-square-foot home, on one floor of a former printing house, has high ceilings and full-height windows. Designed to be open to allow daylight to penetrate the entire floor, the project is on track to receive its Leadership in Energy and Environmental Design (LEED) certification.
“You could say it’s right-sized for them,” said Guy Geier, a senior partner at FXFowle Architects, which designed the space. “They have room for growth.”
To compensate for smaller individual workspaces, architect Randolph Gerner sees companies adding amenities like showers, exercise facilities and pantries with dining areas. While closed-door offices haven’t disappeared completely, they’re becoming “an endangered species,” he said. Firms in the financial services sector in particular are doing away with enclosed offices.
“It’s a cultural change,” said Gerner, principal of Gerner, Kronick & Valcarcel.
While the economy is pushing companies to maximize their space, current design also reflects the collaborative nature of the work environment today and the desire by companies to encourage open communication, Gerner and other architects said.
And while the trend toward denser offices has been evolving naturally, and should not be seen as a direct response to the economy, a smaller footprint obviously saves a company money in hard times, Gerner said.
“The present economy may speed a company’s plans to move in this direction,” he said. “Obviously, doing more with less helps the bottom line.”
To save on construction costs, companies in some cases don’t demand a gut renovation. Instead, they try to make an existing layout work, and re-use the lighting, furniture and other fixtures left by previous tenants.
“In the last six to 12 months, we’ve seen a couple of clients move into existing space and ask us to look hard at how to re-use existing features,” said Geier, of FXFowle Architects. “We’re seeing more interest in finding ways to re-use what’s already there.”
From financial services companies to law firms, companies across the board are focused on designing their new offices cost-effectively, said Michael Kleinberg, co-president of MKDA, a corporate space planning and interior design firm. For example, he does not see companies splurging on top-of-the-line furniture.
“For the most part, many of them are looking either to re-use the furniture or, if they’re purchasing new furniture, they’ll be very price-conscious,” he said. “They’ll compare many different manufacturers and not go to the highest end.”
When it moved to new offices at 99 Hudson Street, the Rosetta marketing company did not replace the modular office furniture already there, except for purchasing a few pieces and fabric panels for the work stations, said Edin Rudic, a designer at MKDA, which worked with Rosetta. For private offices, the company purchased economical desks with faux wood finishes made of plastic laminate.
Demand for luxurious new offices has also dried up at John Gallin & Son, a family-owned construction firm that specializes in office interiors for clients from a variety of industries. Instead of high-end materials like sliding glass and metal doors for perimeter offices, the company’s latest projects are being built with less expensive products, said Mark Varian, the company’s president. The company also has seen a decline in projects reaching for environmental LEED certification.
“When the economy gets hit, they’re not going to put [in] a $250-a-square-foot office headquarters,” he said. “We’re seeing more demand for back offices with pretty traditional standard construction.”