Tag Archives: Beth Harmon-Vaughan

The C3 office building, in Los Angeles, was re-imagined by Gensler to include more "front doors" for suites, which are depicted by the colorful stairways on the building's exterior.

Office Mate: The creative endgame for functional obsolescence

Forget the corner office. These days, it’s about the coffee shop around the corner, the food trucks outside the lobby, the light rail that passes an office building every 15 minutes.

The work place is all about the worker. Employee and entrepreneur are synonymous. Human resource departments are working in concert with building owners, managers, developers and brokers.

Employee demographics are spanning radically different generations with equally varied needs for a work-life balance. These are all observations shared by industry experts, from international architecture, design and planning firm Gensler, to brokerage houses and developers in the Phoenix Metro.

About a decade ago, traditional offices began to open up for collaborative space. Since then, office environments have contracted around the remote worker and many other trends that ultimately call for very specific, versatile influenced by a company’s DNA. A demand for trendy, compact work environments that encourage collaboration, focus, creativity and accommodates mobility has led to many new speculative and build-to-suit office developments tailored to an end-user’s needs. This is all while vacancy rates in the market hover around 25 percent.

However, many experts say this statistic is misleading. It’s weighed down by the many office buildings constructed in the ’80s or earlier that are structurally — and aesthetically — outdated.

Courtesy of Cassidy Turley

Courtesy of Cassidy Turley

THE OBSOLETE
As Cassidy Turley’s head of research, Zach Aulick, puts it: “functional obsolescence” are the buzzwords of 2014.

Aulick cites Rockefeller Group Vice President and Regional Director Mark Singerman’s assessment at a Bisnow event that vacancy rates in the market were much lower, by about 5 to 7 percent, without including obsolete buildings. Aulick, prompted by such buzzings and the news that speculative and build-to-suit development was happening despite vacancy rates higher than 20 percent, looked into the functional obsolescence among office properties in the Phoenix Metro and found that Singerman was right.

Net absorption of office buildings constructed after 1990, Aulick reports, accounted for 4.4MSF in 1Q 2014. In that same period of time, buildings completed prior to 1990 were reportedly declining in about 320KSF and 200KSF in 1Q and 2Q, respectively. The major contributors or obsolete space is parking ratios and floor plate size.

Midtown, Aulick says, is perhaps one of the hardest hit areas with 10MSF of office and an average age falling pre-‘90s. That area’s options are limited by available space. It takes entrepreneurship, says Cassidy Turley’s Vice President of Marketing Alison Melnychenko, to recognize the highest and best use for the land on which an obsolete building sits.

GETTING IN THE GAME
If an owner isn’t going to sit back on 80 percent occupancy, there are a few options that could raise the appeal of an outdated building. The first move is to retrofit a space — tear out floors or half floors to make higher ceilings. That can be costly and reduces overall volume. The other option is to add to the building’s function. For instance, the Freeport McMoran Center in downtown Phoenix had high user demand for parking. It was turned into a Westin hotel. Buildings along Central Avenue have been converted into apartments and condos — a trend CBRE Senior Vice President of Office Services Bryan Taute says will likely continue.

Retail and industrial buildings are sometimes flipped into office spaces, given the parking issue can be solved. This is more popular in areas such as Midtown or near the airport.
“I think Midtown has the potential to figure a way out of (obsolescence),” says Taute. “If building owners are willing to sell them to new owners with capital to give creative funky ideas. I’m a big believer in mass transit and infill.”

The general idea among people is that Phoenix won’t pay for that kind of re-activated space. But there is more enthusiasm than meets the eye, says Gensler Principal Beth Harmon-Vaughan. Brokers, developers, business owners, she says, see the potential and there are a handful of undisclosed projects in the pipeline on which Gensler is already working.

This call center space features a blue webbing on the beiling as a navigational tool that unites a uniuqe 75KSF floorplate.

This call center space features a blue webbing on the beiling as a navigational tool that unites a uniuqe 75KSF floorplate.

On a local level, a call center space built in an old Motorola manufacturing facility was designed by Gensler to “control the churn” of the company’s employees who go through 12 weeks of extensive training. The existing building’s unique floor plate led Gensler to use a blue webbing on the ceiling as a navigational tool that brings the 75KSF area together.

The call center is proof that these trendy spaces aren’t just for software and video gaming companies either. Real estate offices such as CBRE in Los Angeles have adopted these new space use trends, and Gensler says more professional and traditionally staunch companies such as law firms are coming onboard.

CBRE’s office in L.A., co-developed with Gensler, has a “free-address” system of office space use, often called “hot desking,” which can be reserved for individual use during certain times.

Despite the increase in remote work, companies still want employees to come to the office. Whether its the highly crafted informality of a Quicksilver office’s mix-matched meeting chairs in a windowless warehouse or the raw floors, pet amenities and employee-generated wall art at Facebook’s Menlo Park campus, the younger generation is revolutionizing office space.

Other trends include authenticity – designing the DNA of a company into its office spaces – and having a “front door” instead of anonymous-feeling lobbies. Gensler’s design of Los Angeles’ C3, for example, achieves a “front door” feel through colorful exterior stairwells to upper-story suites.

Phoenix may not be on that level, but change is coming — even to the ’80s-heavy areas of Midtown.

Mod turned a re-purposed Midtown lobby constructed in 1985 into a co-op office space that helps keep the building's outdated features from making it obsolete.

Mod turned a re-purposed Midtown lobby constructed in 1985 into a co-op office space that helps keep the building’s outdated features from making it obsolete.

It just takes a drive down Central Avenue to see the buildings in need of change. The Class-B high-rise at 2828 N. Central Avenue was built in 1985 and offers the typical functionally obsolete issues, parking ratios and small floor plates, explains Aulick. However, it was a building that — with a little renovation — could be turned into the headquarters for the co-op workspace known as “mod on Central.” It’s stylized as a hotel, features a cafe and is a public workspace for remote employees that, as Lynita Johnson, of Olson Communications says, are looking for somewhere that’s “never boring or beige.”

“It’s the way you want to work, because it’s the way you like to live,” she says of the development. Finance and law firms are among the next wave of industries adopting the new kind of office space. Old, dated, standard offices such as Rose Law Group’s former eight-year residence has transitioned into a high-tech, smart, fun, sleek and creative space in Old Town Scottsdale, near a cultural hub of restaurants.

Rose Law Group’s employees skew “young and energetic,” says Jordan Rose, founder of Rose Law Group. “We are 85 percent below the age of 40.” “If we weren’t locked into our old lease we would have been the first to the open floor plan party at least six years ago,” says Rose. “We knew as soon as we moved into the old space that we needed a more collaborative atmosphere that would only be achieved through design.

That said, traditionally law firms are not known as hot beds of creative thought and collaboration. We have a bit of a different model in that we employ lawyers and non-lawyer planners, MBAs, project managers and energy consultants who can help shape the ultimate advice we provide our clients. Sometimes legal advice in a box is just really bad for a client’s bottom line.”
Non-traditional changes include minimizing the firm’s waiting room area, meant to remind the team that clients shouldn’t wait long to see their attorney.

Conference rooms and open space areas are named after employees and balconies that can be used to host meetings. Offices are centered around a park space where people can eat lunch. There are also a few old, full-sized arcade games.

ELBOW ROOM
As space allotted per employee continues to drop to about 167 SF per person — down nearly 100 SF in the last few years, with CoreNet Global estimating a further drop to 151 SF by 2017 — developers are tasked with finding ways to make the workplace more enjoyable. Right now, that looks like raising the roof (or, rather, knocking out floors in high-rises). Floor-to-floor heights in buildings constructed in previous decades have been about 13.5 feet. Now, says Sven Tustin, vice president of development and investment for Trammell Crow, they’re about 15 to 16 feet floor-to-floor.

While eight-foot ceilings won’t make an office building obsolete, Taute says a space will be more challenging to sell and demand a lower rental rate than an office with higher ceilings. Buildings with lower parking ratios typically see leasing 80 percent of its space as success.

Tustin has seen some significant repurposing happen in southern California, most recently at Playa Vista, a former Howard Hughes hangar that received a $50M makeover that includes an office campus for media, entertainment and tech firms.

“There’s an authentic experience to be had,” says Tustin. “In Phoenix, it’s a little more challenging. Our office employment is a little less creatively geared and more focused on labor.”
Midtown is the only submarket that has experienced negative absorption over the last decade, thanks to the light rail, amenities and the right neighborhood.

“The trick,” says Tustin, “is buying those buildings cheap enough. “We’ve explored a lot of new developments for infill. We’ve been promoting this initiative quite a bit and one thing we’ve been concerned with is our flight of the younger demographics who view places as more fun.”

Trammell Crow has challenged itself to create a project that could be just as fun, though not as extreme, as Playa Vista. Also, Phoenix doesn’t boast a lot of old warehouses, notes Taute.

Trammell Crow is working on a 200KSF project at Cooper Road and Loop 202 that’s a two-story tilt-up office building with 50KSF floor plates and 16-foot, floor-to-floor heights. The building, he says, targets software and financial service companies. Trammell Crow is focused on creating “the arrival experience” with escape areas, shade structures and “the small things.”

“Developers have probably emphasized aesthetics more than the experience of a building,” says Tustin. “I think it’s worth reallocating the investment toward the employee.” zThis is where Millennials come in.

“From my perspective, it’s a lot more fun because in Phoenix it has always been about price and the things that create it as a commodity,” says Taute. “Now, the office space is being looked at as an attraction tool, which means people are willing to spend more money. If they can get the rents, to make cool office space…All of those things are good for our city. The longevity is better than cookie cutter office buildings.”

Rendering courtesy of Gensler

Wentworth Property, Northwood Investors to redevelop 234KSF office

Wentworth Property Company (WPC) and Northwood Investors purchased a ±234,446 square foot office project at 1665 W. Alameda Drive. The partners had the vision to see the unique potential in the property and purchased it for $13.83M with plans to spend $20 to $25 million on redeveloping the project. They selected Gensler as the architect, Kennedy Design Build, LLC as the general contractor and Cassidy Turley as the leasing agent.

The Cassidy Turley team of Executive Managing Directors Jeff Wentworth and Mike Beall and Vice Presidents Sean Spellman and Chris Walker represented WPC during the property purchase from FNB Fountainhead, LLC.

“This property was the perfect vehicle for us to come in and reimagine it as an open, creative office environment where we can create an interconnection between indoor and outdoor environments,” said Jim Wentworth, Jr., Principal. “Even the most conservative companies want this type of office space because they understand how the work environment plays a major role in attracting and retaining employees, productivity and synergy within their company.”

The team plans to start the redevelopment of the 1665 Alameda project this year with availability by mid-2015. “There is enormous demand in this submarket for unique office space for large tenants,” said Cassidy Turley’s Jeff Wentworth. “This property gives us the opportunity to deliver innovative, flexible office space perfectly designed to function for tenants from 30,000 to 235,000 square feet.  It provides 16 to 20’ ceiling heights, 7/1,000 SF parking and because of the connection between the indoor and outdoor spaces there is the opportunity for functional space not under roof.”

The single-story existing 1665 Alameda building was constructed in 1986 and has been used by multiple tenants until the recent purchase of the property. The challenge was to significantly transform the building image and regain its stature as a viable Class A office environment. WPC and the Gensler design team saw the opportunity to transform the site and building to develop an amenity–rich, creative workplace environment that embraces its freeway location with direct visibility from I-10.

“Renovating existing building assets is an exercise in sustainability allowing us to extend their life and usage.” says Beth Harmon-Vaughan, Managing Principal of Gensler’s local Phoenix office. “The 1665 project is in a great location and provided a strong foundation for impactful design upgrades.”

Specific concept strategies focused on heightening the building image, creating a unified appearance, developing personalized entry elements for tenants, adding shared amenities to the site, enhancing daylighting opportunities, and creating indoor/outdoor connections. The existing U-shaped footprint allowed for a functional courtyard space in-between the building volume to connect the interior with the exterior and create usable year-round spaces. The existing mansard roof and visually low façade will be eliminated and a new façade proposed.

Architectural entry elements create a new frontal projection to the street, a fluid architectural language and significant visual markers for branding and tenant signage. Proposed building materials include integral colored cementitious panels, aluminum composite naturally finished metal panels, steel and glass elements, and textural gabion wall features integrating the new façade with the courtyard concept in a seamless fashion. New building amenities include bocce ball, café dining, fitness center, outdoor shaded seating, water features, and a unique rain garden concept that uses sustainable and indigenous landscape.

“Creating a fresh identity and amenity-rich creative office environment in Tempe will help ensure attraction and retention of top tenants in the market.” says Harmon-Vaughan.

WPC partnered with Northwood Investors and purchased Discovery Business Campus (DBC) in November 2011. DPC is a 136 acre campus with 800,000 square feet of existing office space and up to 1.6 million square feet of additional, entitled Class A office, hotel and retail development in Tempe. WPC is currently developing a 237,000 square foot build-to-suit facility for Shutterfly, Inc. at DBC, slated for completion in April 2015.

Beth Harmon-Vaughan - 50 Most Influential Women in AZ Business

Beth Harmon-Vaughan – 50 Most Influential Women in Arizona Business

Beth Harmon-Vaughan – Managing principal, Gensler

With more than 30 year’s experience, Harmon-Vaughan leads design teams in innovation and service for Gensler in Phoenix. Her body of work, encompassing almost every type of commercial and institutional project, is continually recognized for design excellence. As managing principal, Harmon-Vaughan oversees project design development, management and overall strategy. She serves as the client’s advocate, challenging the team to explore all options to ensure solutions are thoroughly developed. Harmon-Vaughan has been recognized and honored by her peers with fellowship status in the IIDA.

Surprising fact: “I’m half Canadian.”

Biggest challenge: “The recent recession, which we have overcome by having positioned for a better market while building our local design portfolio.”

Fifty Most Influential Women in Arizona Business – Every year in its July/August issue Arizona Business Magazine features 50 women who make an impact on Arizona business. To see the full list, read the digital issue >>