In the world of commercial real estate, understanding market trends and industry shifts is crucial. In a recent episode of CORT Workplace Talks, host Melanie Jones engaged in a detailed conversation with Kyle Gellenbeck, Director of Project and Development Services for Cushman Wakefield in Arizona. Their discussion offered a close look at Phoenix’s thriving market, the transformation of office spaces, and the pivotal role project management plays in the current real estate landscape.
Phoenix, Arizona, stands as a testament to the significant growth potential within the industrial sector of the real estate market. As Gellenbeck illustrates, “Manufacturing facilities and logistics operations are flourishing,” attributing this growth to the robust labor market and tax advantages that make Arizona an attractive location for businesses. For example, companies like Intel and TSMC have expanded their operations in Phoenix, further bolstering its desirability.
COVID-19 has catalyzed a dramatic shift in office space needs. “Companies are now downsizing or consolidating their office spaces, focusing on quality to entice employees back to the office,” Gellenbeck shares. The traditional model of a “sea of workstations” is giving way to more flexible, collaborative, and amenitized spaces. For instance, companies are increasingly seeking out office spaces that offer high-quality facilities in prime locations, leading to a ‘flight to quality.’
In line with this transformation, Gellenbeck also notes a growing trend towards sustainability and circularity in office spaces. He shares, “I think probably the most prevalent area for that has been around building out spec suites.” This shift towards sustainable practices in office spaces not only benefits the environment but can also result in significant cost savings and improved brand image for businesses.
Project management has emerged as a pivotal component in navigating the increasingly complex real estate landscape. With rising costs and procurement challenges, project managers are increasingly taking the lead on projects. As Melanie Jones pointed out, “Project managers are increasingly taking the lead on projects. Their role extends from managing project costs to ensuring sustainability and circularity in design and implementation, thereby driving successful outcomes.”
The real estate industry faces challenges, including increased costs and procurement issues, leading to delayed decisions and changes in project management structures. However, as Gellenbeck optimistically notes, these challenges also present opportunities for innovation and adaptation.
Gazing into the future, Gellenbeck predicts that workplaces will become more amenitized and collaborative, with sustainability at the forefront of decision-making. Despite persisting challenges, he believes the industry’s ability to adapt and innovate will drive its growth.
Given these future trends, several key takeaways emerge for the future of real estate. The industry, particularly in Phoenix, will continue to adapt and evolve, meeting the changing needs of businesses and paving the way for a sustainable future. As the industry navigates these changes, the role of project management will become even more critical in ensuring successful outcomes amidst challenges and change.
