Kate Weidner, CEO of creative agency SRW, starts her day in what for many months has been her personal office and happy place — a 14-person table in a newly designed boardroom.
On the ground floor of a retrofit meatpacking plant in Chicago’s West Loop neighborhood, she manages the agency’s client portfolio, which includes natural food mainstays like Simple Mills and Calbee North America and the product lines of popular chef Stephanie Izard.
The agency moved into its newly renovated office in March of 2020 after relocating from the top floor of a nearby WeWork co-working space in an area that has become the hub of Chicago’s growing tech community. The studio has 40 employees, but, on any given day, only about five to 10 report to the office, where, for now, on-site attendance is optional.
“We definitely view this space as a library-slash-clubhouse for those able to come in.”
During our phone interview in January, Weidner told me she was the only one there, save one of her colleagues “squatting in the creative conference room.”
Here’s the thing, though. She’s comfortable there, and not planning on making any drastic real estate decisions soon.
“We definitely view this space as a library-slash-clubhouse for those able to come in,” Weidner said. “And we are very lucky that it’s on the first floor; we have our own entrance.”
Like many tech companies, SRW is embracing the office as a flexible “touchdown” space. Employees can come in — or not — as they see fit. Office life is evolving rapidly as employees get vaccinated and return in greater numbers, Weidner told me, but the hybrid model for work is unlikely to change any time soon, and that means a new design vision for the workplace: the library.
“If you think about the language of a library, what does that get you?” Elizabeth von Goeler, a principal interior designer at the architecture and design firm Sasaki, said. “It gets you protocols that everybody understands for quiet and focused work. And so it’s a very direct response to the open office spaces created in the last 10 years that weren’t done right.”
“Often those spaces didn’t have the support spaces to hold meetings,” she continued, “and they became so large and open you, literally, couldn’t think. That’s part of the reason for the library format. It gives you another language outside of the office, outside of the design world, to say, ‘OK, I’m going to have a spot to think.’”
Most Companies Aren’t Downsizing. They’re Swapping Out Desks for Conference Rooms and Community Areas.
Imagining office design through the lens of a library also acknowledges the increasingly nomadic nature of work. Like a library, you can come in when you want, use the resources you need and connect with the community — in this case, your colleagues. But you don’t necessarily come every day, or even every week. Most of Sasaki’s tech clients report an intention for employees to work two to four days in the office, von Goeler told me.
“There will definitely be people that have small apartments, live alone, have bad internet, or, for a variety of reasons, want to be out of the house and will come to work five days a week. But that will no longer be the expectation for most people,” she said.
That dispersal of the workforce is changing the tenor of the strategic discussions Sasaki — the design and architecture firm behind Akamai Technologies’ Global Headquarters and Microsoft’s New England Research and Development (NERD) Center in Cambridge, Massachusetts — is having with clients. For the most part, executives and operations leaders are not talking about downsizing; they’re talking about repurposing square footage.
“You’re not really looking for a lot less space,” von Goeler said. “You’re going to take away, maybe, 30 percent of [the desks]. But that space is going to go right back into making smaller meeting rooms for two to four people.”
Even before the pandemic, most office buildings were only about 70 percent full, von Goeler told me. Travel, sales calls, out-of-office meetings and sick days left roughly 30 percent of desks vacant on any given day, and the “existential drag on the psyche” of workers using half-empty offices had many clients evaluating the value of assigned, one-to-one desk arrangements.
Nevertheless, expansive open floor plans had their place. Event hosting, client meetings, camaraderie and culture-building — these weren’t easy to pull off in the proverbial startup garage.
But now the conversation has evolved. Many firms are accelerating the move to smaller “neighborhoods” or “pods” of so-called agile seating, she said. Hoteling at unassigned desks is becoming a topic of renewed interest as firms are looking to allocate more square footage for smaller collaborative rooms and community areas.
Brian Berry, who is a principal in the New York office of the architecture and design firm Gensler, said several of his clients, including a large streaming company, are making similar moves. Their spaces might not read strictly as libraries (though they may contain them), but they offer a balance of public and private work areas.
“Most of the clients I’m working with are not startups anymore, and they want to project that they are sophisticated and serious about work,” Berry told me. “Pool tables, foosball, areas with PlayStations and pinball are not really the focus anymore.”
Instead, tech and media office spaces are likely to become more focused on business objectives, as employees spend less time there.
He referred me to a Gensler 2021 design forecast that notes that “knowledge (and access to it) is the new amenity.” From building safety protocols to booking rooms, data sharing will be key to office coordination as room functions and seating arrangements morph day by day.
“Pool tables, foosball, areas with Playstations and pinball are not really the focus anymore.”
Further, “as the office becomes more of a collaboration hub,” planning for new builds and renovations will shift “from a space-by-desk basis to account for the higher ratio of collaboration-driven work that’s expected to bring people back into the office.”
All this, of course, will create equity concerns, as companies attempt to reconcile the disparities between office and home setups. Outfitting conference rooms with mural-sized virtual whiteboards and providing stipends for remote employees to purchase high-quality monitors, comfortable furnishings and stable Wi-Fi connections are practical ways companies can begin to reckon with these differences, according to Berry.
Lease Terms and Growth Ambitions Are Defining Real-Estate Decisions
The big unknown, though, is whether talented tech employees will want to return to the office at all. And, if they do, will executives want to foot the bill on the real-estate costs to bring them back — especially if teams have proven they can be as engaged and productive at home as in the office?
Weidner believes the answer to both questions is an emphatic “yes.” While declining to share the purchase cost of SRW’s space, she said the benefits of having a dedicated office go beyond its usefulness for clients’ photo and video shoots.
“Together, we can collaborate better, we can get a change of scenery, a breath of fresh air. And I think that people really want to do that,” she said.
Especially if they have a swanky new office.
SRW’s new space is not shy on amenities: a kitchen, a lounge with stadium-style seating and dozens of throw pillows, blue velvet-tufted couches and plants galore. Arranged a bit like a billiard table — with a central hub of desks encircled by conference rooms, sound-proofed booths for private phone calls and a wellness and nursing space — it exemplifies the balance between public and private areas many designers view as the way forward for hybrid teams.
The space is serving SRW’s needs well. But Devpal Gupta, executive managing director at the Phoenix-based commercial real estate firm Cushman & Wakefield, said that, for some companies, smaller offices or a move to fully distributed teams may be the best decision.
“If you look at what Microsoft, Google and Amazon are doing right now, they’re saying, ‘Work from home.’ But if you track where they’re signing leases, they are aggregating a lot of real estate right now.”
In practice, companies’ real-estate decisions during the pandemic have been a mixed bag. While many smaller and struggling firms are signing subleases and moving into co-working spaces to cut costs, most larger firms are holding onto their spaces, even when landlords aren’t willing to budge on rent. Some firms are even expanding their footprints.
“If you look at what Microsoft, Google and Amazon are doing right now, they’re saying, ‘Work from home.’ But if you track where they’re signing leases, they are aggregating a lot of real estate right now,” von Goeler said.
The other caveat is that a V-shaped recovery might demand extra square footage for firms to grow their staffs quickly once the economy rebounds. Where companies are in their lease terms, as well as how well they’re realizing their growth predictions, is defining office-space decisions.
“If you can consolidate with fewer people in less space, you can bring down operations costs and improve the bottom line,” Gupta said. “But each company has a culture they want to maintain, and the flight to safety is different for everyone.”
For some firms, that flight means relocation to the suburbs or less expensive regions of the country where they can lower their operating costs. An estimated 687,000 California residents have relocated to Texas in the past decade, and Gupta said the exodus to Texas and other sunbelt states such as Nevada and Arizona is not just among homeowners. Zenefits, Google and Microsoft have all opened offices in Arizona; Intel has two chip manufacturing plants there; and Taiwan Semiconductor Manufacturing Co. just opened a new factory. The opening of the electric car manufacturer Tesla’s Gigafactory in Austin, is, in Gupta’s words, “a big deal.”
“If you can pay employees with the same skill sets $200,000 in the Bay Area and the same rate or less in Phoenix, or they can work remotely, you’ve got a 70 percent reduction in cost of living because of the difference in housing costs,” he said, estimating houses are three times as expensive in the Bay Area as in Phoenix.
Payroll adjustments for cost of living, as well as real-estate and tax savings, have helped some companies shoulder the pandemic’s economic impact, he added.
First-Floor Spaces Connected to the Community Are at a Premium
Safety, of course, is also a top-of-mind concern for executives. To ease employees back into the office, SRW has adopted workplace health and safety protocols from the Illinois Department of Health, including requiring employees to remain at least six feet apart, posting social-distancing and hand-washing signage, providing masks and sanitizing high-touch surfaces.
But when it comes to safety, the real coup, Weidner said, was securing ground-level office space that employees and clients could access without an elevator. Not only is poor ventilation in the cabs a concern, but some building managers worry occupancy restrictions — many elevators now have a four-rider limit — could create logjams when workers return en masse.
And there are other reasons to want to be close to the ground.
“Especially among tech companies, we’ve been seeing, for probably 10 years, a real push toward lower levels because [tech firms] don’t need the prestige of law firms that had previously been targeting the tops of those towers,” von Goeler said. “There is a very different connection to the city when you are closer to that ground level. So we’ve been seeing a lot of interest in that. In Boston, five years ago, there was actually vacancy mostly at the top of buildings, whereas the bottoms were filling up very quickly.”
“There is a very different connection to the city when you are closer to that ground level. We’ve been seeing a lot of interest in that.”
That assessment echoes a prediction in the online Gensler report that “tech companies are looking to extend their reach into the surrounding neighborhood by investing in the ‘first floor’ — creating street-level spaces and workplace amenities that can be enjoyed by the community in new ways.”
While there’s no doubt some tech firms will flee to mid-market cities or the suburbs, Berry said there is still a hunger among his clients to be in the city.
“People want to connect with clients in an urban environment. They want that density, the energy of being connected. That dynamic quality still exists,” he said, adding that “the third place between home and a dedicated office, the WeWork model, will still be a viable choice.”
The upshot is the office is not likely to go away any time soon. But it may feel more like a library. Or a social club. One thing it probably won’t feel like is a surrogate home. People, it seems, are craving a return to the physical boundaries between the home and workplace that lent their lives structure and balance.
“I would hate to see the office go away in America, in general, because I love it here,” Weidner said. “And I think that it really benefits my personal mental health to be able to have the option to come here. It also really benefits my personal mental health to be able to work from home. And I think one great benefit that the American workforce has seen over the past year is that flexibility. So, to me, the future is flexibility.”