Jose Cruz, Jr.
February 14, 2020
We’ve digitized over 250 office floors in New York City in 2019. Here’s what we found.
In 2019, Integrated Projects partnered with Owner-Operators to digitize, design, and depict over 2.5 million square feet of commercial space. Office Operators within the flex-space sector claimed cost, scale, and speed to market were their top priorities when working with design and construction professionals:
We have to acquire and build millions of square feet of office space this year across multiple North American cities. Traditional architects and engineers can’t handle these volumes, aggressive project budgets and timelines,” one of our office operator clients wrote us over email.
By “traditional”, our client refers to the “design-bid-build” project-delivery method, as defined by the American Institute of Architects (AIA). This method might be industry-standard, but it doesn’t scale for what high-growth Owner-Operators require.
Just picture it: half-a-dozen design consultants, their subconsultants, the bidding process, and the design coordination involved on just one project. Now imagine having to scale that to 100 locations in one year. It doesn’t work.
Here’s a few lessons we’ve learned:
The design of office interiors should be treated as a product problem — similar to the approach within the technology sector. While bespoke design services champion novel ideas, designing your office as a product focuses instead on refinement. This means embracing data-driven design iteration and an advanced kit-of-parts. Owner-Operators can now define and design inputs, build and analyze outputs, then repeat.
Quantity, in this case, does lead to quality: your 100th office location will be more efficient, more informed, and more cost-effective than your first. By treating space as a product, Owner-Operators can achieve the cost and time efficiencies that come with standards, while building on a foundation of prior product intelligence.
Owner-Operators seeking to integrate tech-enabled solutions in their office designs now require their architects, engineers, and contractors to use new design technologies. At the same time, operators still clutch to fragmented project delivery methods out of habit — “design-bid-build” often being a misguided default.
However, when applied within the right framework, design technology tools such as building information modeling (BIM), 3D laser scanning, and mixed reality have outsized return-on-investments. We’re leveraging these tools and processes to achieve 5x to 10x efficiencies in cost, speed, and overall design execution for our clients.
A BIM-centric approach without the appropriate framework, stakeholder buy-in, and feedback loop is simply applying a software band-aid on to a larger infrastructural divide.
New York commercial real estate is a black box of inaccurate building information.
Given important data points are held by New York City landlords — effectively, the gatekeepers of access to building information — the data points provided within an Operator’s lease are often outdated and skewed. Think along the lines of inaccurately dimensioned plans, and significant discrepancies between actual versus rentable square feet information. As the saying goes, bad data in, bad data out.
After servicing 267 commercial floors across Manhattan this year, we’ve found that Owners-Operators, over 80% of the time, are leveraging outdated building plans accounting for a ± 5–10% discrepancy from actual site conditions. Within a 15-year lease agreement for a single 10,000 square foot office space at $60 per square foot in a Class-B Midtown building, either the Owner or Operator could be losing as much as $900,000 — for that floor alone.
By strategically partnering with Owner-Operators across major North American urban markets, we’ve provided both parties a consistent system of record. We’ve created a baseline based on actuals saving Operators on leases, and equipping Owners with accurate documentation for construction and facilities management.
Design firms of the future, take note. We’ll no longer simply be designing desk layouts and finishes but, rather, working with clients to evolve building information into intelligence.
There’s no shortage of interest in data within the design and real estate community, particularly how big data can inform and optimize the lagging architecture, engineering, and construction (AEC) industry.
It’s important, however, to distinguish between data, information, and intelligence. In its rawest form, data outside a structured dataset is not intrinsically useful for Owner-Operators looking to build out spaces at scale. Evolving data to information requires skilled designers, product managers, and specialists to make sense of it in the form of project assets: registered 3D scans, as-built models, and design plans. These assets bring immediate value to the Owner-Operator looking to build out an office space, but they don’t extend their use beyond the individual project.
The Owner-Operator looking to achieve high-growth within the flexible office sector will require a robust analytics infrastructure of this information at the scale of a global portfolio — turning micro information (floors, rooms, equipment) into macro intelligence and into action across their organization and locations.