Rowley Properties, Inc.’s CEO, Kari Magill, just recently was invited to speak in a panel at the Bellevue Chamber 2023 Eastside Real Estate Symposium. Topics at the sold-out event centered around the commercial market (Eastside and beyond), housing, project and acquisition finance, and new industries/return to work. It was an impressive line-up, and the program did not disappoint in highlighting the strengths and opportunities of the Greater Eastside market.
The common theme of the event was we’ll continue to see shifts in the market as things shake out. Continue reading to learn more about those shifts through Kari’s lens…
Satellite Offices – Trend or Here to Stay?
One trend Kari expects to see accelerate and be here to stay is the utilization of satellite offices. Satellites are not for every company. It depends upon location/ease of access, where employees live, the type of business and the company’s culture. There will still be headquarters – just smaller and not always occupied. There’s a lot of benefits to the satellite concept for a company and its employees. Some of those benefits are:
- Introduction to new markets.
- Access to talent not available otherwise.
- Cost savings with small spaces and cheaper rents.
- For employees, satellite offices offer a better work/life balance and flexibility. And savings are realized with lower commute times and dollars invested in transportation to get there. People do not want to spend a lot of time in the car and/or be far away from their children; with technological advances and hybrid work here to stay, they do not have to.
One thing that will never change is that there’s a huge benefit in getting teams together in person. There’s increased energy and excitement, productivity, innovation, culture, teamwork, and fun. This is also more likely to happen if work is convenient and fun and provides a unique brand experience that is inspiring.
What About New Industries?
Suburbs are not only good for satellite offices, but they’re also great for helping facilitate new industries. An important shift for WA as an innovative state full of technology and entrepreneurial-focused folks, we’ll see a return of manufacturing to the suburbs. It just won’t be the manufacturing of previous decades. Think high tech manufacturing, not the industrial age. Some of opportunities envisioned are:
- Composites
- Testing
- Nano materials
- 3D printing
- Drones/robotics
- Precision Tooling
- Photonics
Public/private partnerships should be encouraged, and communities should be planning for industry clusters and incentives. Having zoning available and/or the ability to develop or re-develop space to meet emerging needs will be key. It is important we work to keep existing talent here in Washington with competitive taxes, cost of living, etc. Currently, our state must import a quarter of our talent as our universities are currently unable to keep up with the technology industry demand for the workforce. And we’ve got to do something to address the cost of housing and accessibility.
And Way Out There… Let’s Talk About Space Space
A major congratulations to the city of Redmond on its new space district! Did you know there’s a robust cluster of thriving space businesses? They literally have been under the radar, no pun intended. This industry has been growing roughly 5% a year or more.
Space space is not an easy endeavor to provide for many communities. Because many are a start-up and/or venture capital or grant-funded, all dollars go towards research and development. That means, they need inexpensive space that’s zoned industrial. Other important factors are a building with manufacturing and offices AND clean rooms, 20’+ high ceilings that can support a bridge crane, a loading dock, lots of power (480V 3 phase) and most importantly, anonymity.
In Closing
Not everything happens in the office. The utilization of space, how businesses approach the future, and how the workforce connects will continue to evolve – space expectations and needs will change. The commercial office space will weather some changes on the horizon.
And yes – inflation is at an all-time high. And yes – loans are harder to swallow these days given the high interest rates. And yes – we foresee a coming recession. We know that real estate is cyclical, and many are facing some tough years ahead. But history tells us that those tough times do not last forever. During these times, we all need to look for opportunities and work to position ourselves to shoot out of the gate with the right product(s) for our community when the recovery comes. And it will come but it might take a few years. What we know to be true is the Greater Eastside as an innovative hub will continue to thrive, shift, and grow well in the future.