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Remodel Creates Futuristic Office

Companies make statements with their real estate, and CBRE Group Inc.’s new office in the Woodland Hills’ Warner Center tells how and where it thinks people will work in the near future. The world’s largest commercial real estate brokerage is remodeling the former Kate Mantilini restaurant on Owensmouth Avenue into its new office concept that shows employers how to aesthetically adapt existing space to accommodate future changes in headcount. The company selected Warner Center as its showcase location because it sees the neighborhood becoming the heart of the San Fernando Valley. Growth is already occurring, driven mostly by the Warner Center 2035 Plan, which sets guidelines for creating a regional center and a live-work-play environment in the 1.7 square miles surrounding the center. Once construction within the former restaurant’s 10,000 square feet finishes this spring, the full-service brokerage will operate under David Josker, managing director of CBRE’s Glendale office. “There are millions of square feet that can come online in the next 10 to 15 years in the Warner Center – and that’s where we wanted to plant our flag,” Josker said. “That will be a focus for us – land (sales) and development and multifamily.” Future of work In downtown L.A., CBRE reshaped a former law library into its new headquarters. It repeated the process in Glendale, turning 25,000 square feet in a nine-story art deco tower and former Masonic Temple. Kate Mantilini’s restaurant is not as unique as those two, Josker admitted. “But it just shows that we are willing to think outside of the box for looking at nontraditional office uses,” he said. Adapting the space helps CBRE differentiate itself from brokers who just find clients typical office space, and gives it credibility to be able to say it’s gone through the process. Adaptive reuse of structures such as old manufacturing plants and industrial warehouses into offices has become a trend among newer companies such as technology and software developers. The old structures with their high ceilings, tall windows, exposed piping and concrete floors lend themselves to creative office design with open floor plans, little or no private offices and lounge areas that get people working together. Many of the companies that seek out these nontraditional spaces and creative office layouts are those that brokers see as the next wave of clients. Workplace360, CBRE’s newer office concept, adapts a creative office layout and the idea of unassigned desks. Instead of permanent workstations, the firm gives staff laptops, headsets and other technology so employees can work at desks, on couches or even outside. Another component of the strategy is to go paperless. Employees have to purge and then digitize to reduce the company’s footprint, Josker said. “In Glendale, I had 570 filing cabinets that took up 7,000 square feet,” Josker said. “We digitized everything – and all of a sudden I have 7,000 square feet (again.)” Using Workplace360 principals, CBRE took 30 percent less space in its downtown L.A. office when it moved in from its prior location and could also fit 30 percent more staff. In Glendale, the concept freed up enough space to add 50 percent more staff, Josker said. In general, companies can reduce square footage by 25 to 30 percent while increasing headcount capacity by 25 to 40 percent, he added. Workplace360 also encourages wellness elements to create a healthier setting. Employers’ costs to convert to the overall concept vary by case, Josker said, but buying equipment, such as white-noise speakers, and squelching noise with soundproofing is “definitely an investment.” However, cutting down square footage typically offsets those costs, Josker said. CBRE has converted about 10 percent of its 300 U.S. offices to Workplace360, and shows them off to clients. CBRE’s new Oxnard office in the Collection at RiverPark retail center follows the strategy and is half the size of the now-closed Camarillo office. The firm also plans to close its Westlake Village office once Woodland Hills opens. Since the L.A. office’s conversion three years ago, more than 200 of CBRE’s clients have adopted the strategy, Josker said. Valley’s downtown Given its past life as a restaurant, CBRE’s new space is not an easy conversion. Contractors had to jackhammer four levels of concrete floors down to grade, and must fill dozens of deep pits in the floors that once held foot sinks and the abscess left by the kitchen’s grease trap. The inner walls, saturated with smells of cooking oil and grease, were torn down. Numerous small windows will be pulled out and replaced with floor-to-ceilings ones. Finally, a new ventilation system will be installed. On the exterior, CBRE will strip the current stone façade and wood trim and convert the patio into an outside work area facing a park-like area and waterfall. CBRE signed a 10-year lease for the space, and Douglas Emmett Inc. in Santa Monica, owner of the towers, had to agree to a change of use to office. The site will eventually employ about 50 people handling land, multifamily, industrial, office and retail real estate deals. Jay Rubin, a principal with commercial real estate brokerage firm Lee & Associates – LA North/Ventura Inc. in Sherman Oaks, said CBRE’s location choice is “a good move.” The Warner Center, with its 6 million square feet of space, continues to struggle with vacancy rates of 17 to 18 percent, Rubin said, and more tenants leave than move in. As a result, rents haven’t changed much in the 30 years since the towers opened. But having the world’s biggest real estate firm invest there means it sees a strong future. “CBRE made this (choice) because it’s betting on this market and it believes in it,” he said. “I think it’s positive for everybody.” Josker said CBRE plans to pursue Douglas Emmett, which owns three of the five Warner Center Towers, and shopping mall developer Westfield Corp. of Century City, as future clients. Westfield owns three malls within walking distance from Warner Center. It also has proposed replacing one of them, the Westfield Promenade shopping mall across the street from CBRE’s new location, with a massive mixed-use community named Promenade 2035. Plans are for 1,400 residential units, retail and office space, an entertainment and sports center and two hotels. Construction won’t begin for another four to five years, the company has announced. “We’re definitely talking to them about how to maximize the space they will have there,” Josker said, “because they have entitlements for office and retail and hospitality and multifamily.” As Rubin sees it, the Warner Center is going to be the Valley’s top downtown area, so it makes sense for CBRE to want to be in the middle of it. Developers are attracted to the area because the Warner Center Plan allows higher density without height limits and offers clear guidelines and a streamlined entitlement process, he said. Additionally, the Warner Center and Westfield are incorporating a live-work-play element into the area, which Rubin believes will help bring excitement, prestige and more tenants taking office space in the next two years. Brokers have come and gone into the Warner Center over Rubin’s 18 years specializing on the area, he said, so his attitude is the more, the merrier. “I’m not concerned about more competition because I think the positive direction of the area will be more important than the competitive nature of our business,” he said. “Brokers like areas that have growth – that have upside in value. Brokers like opportunity, and they see the opportunity there.”

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