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Old Posted Feb 1, 2017, 11:04 PM
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chris08876 chris08876 is offline
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Why 2017 will be the year of office construction

I tried to compress the long article to talking points.

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Why 2017 will be the year of office construction

Dodge Data & Analytics predicted in its 2017 Dodge Construction Outlook that office construction starts would finish 2016 9% higher than in 2015, primarily due to a few megaprojects in New York City, but would surpass that mark for 2017 with 10% more construction starts, or 10 million more square feet than in 2016.

In fact, Dodge predicted the office sector will see the strongest surge in starts of any other segment of commercial construction this year.

Alex Carrick, chief economist for ConstructConnect, said he expects an 11.3% uptick in private office construction starts in 2017, or $20.5 billion. "The cycle seems to be pretty strong," he said, reminiscent of 2007 and 2013 peaks.

Experts explain that demographic preference and employment factors are playing a role in the expected rise in the office sector this year, as well as creating a shift in office design trends.
Why office demand is on the rise

Carrick said the sector's growth is being driven by office-based employment, which saw a 1.5% increase last year. Job growth in professional business services, accounting and bookkeeping, architectural and engineering services, computer design services, telemarketing and customer service call centers are all driving the need for more office space, according to Carrick.

But there's more to the story than just the numbers. It's also about the "why" of the cities in which companies are choosing to build and the "who" they're trying to attract.

Long gone are the days when downtown workers scurried home to the suburbs, according to John Dempsey, principal of commercial development company CA Ventures' CA Office division. Workers are skewing younger, and millennials often prefer a downtown, walkable lifestyle — a trend that has not gone unnoticed on the part of employers.

Growing popularity of urban areas

The key to this draw is walkable neighborhoods with access to public transportation. These areas are where many employers have set their sights for new office construction. "You won't see the same surge in other locations that don't have that," Dempsey said.
Shifting trends in office design

The trend toward a more community-based lifestyle, Dempsey said, has trickled down to office design as well. Businesses are consolidating their floorplans and looking at office space "as a tool rather than a birthright."

When businesses need more room, they're now more prone to horizontal expansion rather than vertical growth. "They don't need one person in one work station when they’re on the road most of the time," Dempsey said.

He noted that it's more common today for office space to be designed to enhance communication and sharing among coworkers, which results in getting work done faster. Dempsey said that no one has the time or finds it necessary to search for an answer across several floors of operations or wait for an email or a phone call. "Line of sight is very important these days," he said.

When it comes to the contractors building all this new office space, Dempsey said he hasn’t seen any problems with those in the office sector being able to handle the work. But when the market gets busy, developers benefit by having a proven group of contractors in the pipeline, he noted.
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