The Bow Building

If you have been downtown in the last few months you might have realized that traffic isn’t as bad as it used to be. This can be attributed to the fact that thousands of people have lost their jobs since the price of oil went into the tank, and rumour has it that there will be more layoffs in January. Of course this frees up a lot of office space which companies will try to sublease to other companies to at least recover some of their cost on a long term lease.

While you were downtown, you may have also noticed that despite all the doom and gloom in the energy business, there are a lot of construction cranes still working in the skyline. Some of those are working on residential condos which are still selling at a reasonable pace, since people still need a roof over their heads and apartment style condos tend to start at the lower end of the price scale. However there are several office building under construction that were started before the collapse in energy prices, so they have to finish them no matter what the market is like. I believe the rule is that once you are out of the ground and above street level, you must complete the building. This is a great requirement since it would be a real eyesore to have a building that is half finished sticking out of the ground for what could be years until the market improved.

Brookfield Place under construction

Some of the buildings that are under construction are

1. City Centre 1 which will be 36 stories high and add another 853,032 square feet to the inventory of downtown Calgary. The building is currently nearing completion and should have the first tennants move in by March of 2016
2. Eau Claire Tower which will be 25 stories and offer another 613,000 square feet to the market. It is also very close to completion.
3. 707 Fifth Street also known as Manulife will be 27 floors with another 564,350 square feet of space.
4. Brookfield Place East will have 1.4 million square feet on 56 floors and stand 247 metres high while taking the title of Calgary’s tallest building from the Bow once it is completed sometime in 2017. Of course, it will also take the Bow’s title of tallest building outside of Toronto at the same time, but even Brookfield’s reign won’t last long. The new Stantec tower that is currently under construction at the new arena district in Edmonton will take the title with a final height of 251 metres.

So, now you can see that vacancy rates have nowhere to go but up when you combine all the job losses and new construction coming on the market.

According to “Calgary Economic Development” the downtown vacancy rate was 91.% in the third quarter of 2014 and has jumped dramatically to 14% in the third quarter of 2015. Many real estate experts expect the rate to peak at around 18% near the end of 2016, however some think it could go as high as 25%. Then there is the issue of how much space is leased but still empty? Some companies may have some unused space that they haven’t tried to sublease. Regardless, the vacancy rate is high and going higher.

What effect has all this available space had on leasing rates? According to some real estate brokers, rental rates have declined to 2005 levels and could fall even more. The silver lining in all that is that smaller businesses might be able to return to the downtown core now that rates are more reasonable. Rates were so high a couple of years ago that even Imperial Oil and Canadian Pacific Rail moved into the suburbs. Calgary could also attract other head offices in different industries now that all the premium space is available at bargain prices.

Even with all the bad things happening in Calgary right now, this city will survive and thrive – it always does

It is always interesting to see how certain companies try to use their buildings and facilities to lure and retain talented people. That was one of the reasons that EnCana wanted to build something as amazing and unique as the Bow, and it probably did help convince some people to work for them over the competition across town or across the street. If you had a choice wouldn’t you want to work in a building that is a tourist attraction?

Here is an interesting article that explains what some of the biggest tech giants have for buildings and their motivations for building them.

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The Pixar Campus is a great example for an innovative office

Can an innovative office make a successful company?

For the movie studio Pixar, the answer is yes. When the company outgrew their old office, the management was aiming for a creative work environment. In his must read “Creativity Inc.” Pixar CEO Ed Catmull describes the process of creating a new headquarter. Steve Jobs took the lead and crafted every detail of the new office building. The building is by now even called “Steve’s movie” by the employees. One key aspect of the innovative office is to encourage random encounters. There are central meeting places and spaces for creative freedom. Employees are encouraged to decorate their work stations. Almost everything about the building is drilled to boost the creative output. Pixar shares some impressions on it’s webpage.

Apple Campus 2

Apple Campus 2 – Another well designed Apple product

In the 1990s than Apple CEO John Scully build the first big headquarter at 1 Infinity Loop in Cupertino. It was functional but fragmented and reportedly Steve Jobs hated it. Since the company outgrew the offices they had to find something new. For years Apple was buying land secretly in the center of Cupertino. The plan was to build a giant open office space, shaped like and UFO. At a hearing at the city council, Steve Jobs revealed its plan. Like other Apple products the new office space is crafted with perfectionism. The technique to bend glass to the rounded corners of the building had to be invented. On 260.000 sqm Apple will fit 12.000 people in one single building. This shall improve communication. The open structure moreover aims for better collaboration.

Facebook Campus – A social working place for a social network

A good 20 minutes from the Apple headquarter lies the central of Facebook. This innovative office was opened in 2011. It has space for 9.000 employees. The area it covers are mere 24 ha. From the outside it appears like a gigantic colorful storehouse. It follows the trend of great open spaces and opportunities for random encounters. In addition, it lays more emphasis on short distances than the Apple-UFO. For the outstanding architecture Facebook employed star architect Frank Ghery.

Facebook Campus

Googleplex – Mother of all headquarters

Google opened a new office in 2004 in Mountain View. Formally this was Silicon Graphics grounds. The legendary workstation creator founded by Jim Clark. During the rebranding in 2015 it was one of the first buildings using the new Google logo. Since the structure already existed, Google put quite some effort in making it an innovative office. The redesign of the old buildings appears now like an amusement park. Google goes for diversity and initiatives on the campus. There are bikes, pools, gyms, solar panels, 18 canteens among others. The office space is “only” 47.000 sqm so it is slowly outgrown by the company.

Google Campus

How does a great campus support success?

To hire star architects is an expense only few companies can justify. To defer cubicles is a risk. On the other hand, to ask for out-of-the-box thinking is quiet a lot if employees are put into them for work. Surely skilled personal and superior management also contribute to company success. An innovative office space is not to make everything colorful. An innovative office enables innovative thinking. Aspects of that are the encouragement of communication. Facilitate random encounters. Allow employees to work in different environments. But also simple things like good lighting and noise reduction. To plan an innovative office is a lot of work. To manage it is as well. There is no single recipe for that. From clean Apple to wild Facebook architecture it has to support the company goals. Office space is the single biggest value statement of a company. Especially in Silicon Valley where the war for talent is tense an extravagant office can also serve as a recruiting measurement.