Out with the old. In with the improved.

Posted on: April 8, 2016
Tags: Construction

We have found a niche in tenant improvement construction projects. This is less of a result of our desire to perform gratifying work – putting polish and shine on a building. And more about our customers' desires to enhance their existing space.

There is an uptick in property enhancement and TI work for a few very interesting reasons: 

Low supply and less new construction 

As the market continues to turn around after the economic recession, new construction and financing remains constrained. However, property owners and landlords are investing in improving or expanding their current spaces to increase rents and business productivity.   

Landlords competing by offering more attractive TI packages 

As the tenant improvements gain momentum, landlords are competing by offering more TI packages. These offerings allow tenants to customize interiors without paying for a full redesign out of pocket, and are a key piece of lease negotiations. 

Technology pushing change  

In order for businesses to keep pace, they have to anticipate and adopt new technologies. As a result, technological changes are being implemented to impact maintenance, operational efficiency, big data and access management, cloud computing, mobility, tenant use and appeal, communications and connectivity. 

Job growth and millennial attractiveness  

Employment levels are back to their pre-recession peak. Which means companies are hiring and heavily investing in recruiting and retaining top talent. This calls for out of the box benefits for employees that include unique office space design. In a recent World Property Journal article Todd Burns, President, JLL Project and Development Services, Americas said, "By 2020, the U.S. workforce will be comprised of 50 percent Millennials, more than all other generations combined. Individually, they may not realize that they're influencing national construction trends to favor tenant improvement over new construction, but the numbers show it's no coincidence." 

 It’s not just a desk at the office anymore. Employers are finding value in space enhancements that are particularly important to Millennials including increased collaborative spaces (and noise management), mobile workspaces and technology, wellness centers, ambiance lighting and trendy finishes.   

Green building impacting occupants 

There is also significant attention being made to the health impacts and possible benefits of green building on its occupants. This is now a major factor in building design and enhancement. Many recent studies prove that healthier buildings result in better worker productivity. Lighting is just one factor in promoting healthy environment from office to hospital buildings. This enhancement is affordable and a relatively quick solution for more immediate productivity. 

Brand Identity taking new and important forms  

Competition is unrelenting, and the need to have a clear “brand identity” in a traditional marketing sense, but now equally important, is bringing the brand to life internally and integrating it at every touchpoint. Organizations are investing in design changes to carry their brand forward throughout their environments more than ever before. From simply changing out paint colors, to graphic and signage installations and layout reconfiguration to bringing corporate ideals to the forefront through larger scale building strategies like sustainability.  

Reuse, renew, and repurpose is a trend that is here to stay 

Reducing resource use, repurposing or reusing spaces and materials and protecting the environment is only growing in importance and will continue to be a priority for thriving businesses. We’ve seen repurposed shipping containers used as office spaces; skids as shelving and even license plates and hubcaps as wall art. It’s economical, environmental and interesting which is a recipe for success in space planning.  

Chad Nahrup, President of HuDawn states, “We didn’t set out to be a tenant improvement contractor at day one, but we have built a passion for this type of work that is also filling a huge need in the market and for our clients, especially right now. It’s exciting to be a part of such improvement across the healthcare, retail, commercial and industrial sectors.” 

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