Putting butts in seats – part 2

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From Matt Giffune
Associate
Jones Lang LaSalle

We need “butts in seats” for the brokerage industry to thrive. That means job growth. Where will it come from?  Here are more reasons why it’s going to be a challenge to get butts in seats going forward.

Co-working space – I’ve had the pleasure to experience places like the Cambridge Innovation Center and MassChallenge, where teams of lean start-ups come together to generate great ideas without taking large footprints of office space. It would fly in the face of the Lean Start Up movement if companies suddenly filled floors of downtown office towers at high rents once they made it.

The companies that are driving the innovation economy, representing a flicker of job growth, typically find a co-working space that provides all the amenities of a dedicated office as well as the intangible amenity of collaboration with other innovators. Or they will find a cheap sublease like Gemvara did and backfill the seats that have been vacated.

Urbanization of America – Suburban office parks are at a cross road. According to the Urban Land Institute’s 2010 report Emerging Trends in Real Estate “the prospects for investment are much stronger for smart growth than they are for sprawl.” This means cities are going to benefit from the little job growth we see in the future.

Even VCs that helped shape the suburban Boston office market are moving back into the city. Efforts such as redeveloping urban locations for transit oriented development, spending fewer natural resources on commuting, reducing residential footprints, and providing 24 hour living environments will attract the largest generation of American workers since the Baby Boomers. Biogen Idec’s move back into Cambridge after less than three years in Weston is a perfect example. As urban buildings benefit from in-migration, the hope is that there will be more butts in seats in the city to offset the difference.

-Matt
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