Intellicenters ™ – A New ‘Brand’ of High Performance Speculative Office Buildings

[ By Steven M. Van Amburgh ]

Large, multi-national companies have different real estate needs today than they did 20 to 30 years ago, and many have realized that they’re stuck in buildings that make it difficult for them to satisfy their need for efficient work spaces and updated information technology in a comfortable environment. That’s why Koll Development Company (KDC) partnered with Prudential Real Estate Investors to develop Intellicenter™, roughly two million square feet of branded, speculative office buildings with a projected value of $250 million.

KDC’s Intellicenter™ buildings provide corporate users with the kind of space typically available only in build-to-suit projects. The buildings are Silver LEED (Leadership in Energy and Environmental Design) certified and feature large, efficient floor plates, raised access flooring and high-density parking. Today, there are five Intellicenter™ buildings in Atlanta, Georgia; Dallas and Houston, Texas; Riverside, California; and Charlotte, North Carolina. The Dallas-based company hopes to have five more under construction by the middle of 2007. Each building offers between 150,000 and 200,000 square feet.

Designed for Productivity
Armed with feedback from more than 40 corporate users who participated in a KDC survey conducted between October 2004 and February 2005, KDC joined Gensler and Forum Studio Inc. to design a smart building for the future – Intellicenter™.

Designing the building was not as challenging as paying attention to overall project costs and making certain budgets were in line with what corporate America was willing to pay. Specifically, the KDC company had to avoid over-designing the buildings, thus making them unaffordable for prospects. Intellicenter™ buildings cost about $3 to $4 per square foot more to develop because of the raised access flooring. Rental rates are about 30 to 40 cents per square foot higher, but the added cost is more than offset by energy savings and lower maintenance expenses.

The large floorplates in Intellicenter™ buildings allow for 40,000 to 50,000 square feet of column free space, one of several key design elements.

KDC’s Intellicenters™ feature windows with a high-performance solar coating that reduces heat and interior glare, as well as sunshades that provide additional solar relief and light shelves that draw daylight into the workplace. Also, the Intellicenter’s tilt-up construction provides a smooth façade that mitigates any troublesome maintenance issues that could result in additional future costs.

Several design elements critical for the Intellicenter™ buildings are large floorplates, which allow for more efficiency and 40,000 to 50,000 square feet of column free space, and raised access flooring with under-floor air delivery. Increased parking is also a key element. Intellicenters™ have 30 to 50 percent more parking than conventional buildings, with the Intellicenter-Houston building providing six spaces per 1,000 square feet of building space. With bigger floorplates and more occupants, KDC found that increased parking was required. Older buildings typically provide one parking space for every 300 square feet, not enough for companies that fit one employee per 175 to 200 square feet.

Because of the large, efficient floor plates, Intellicenters™ are able to accommodate amenities such as fitness centers and cafeterias. Forward-thinking companies have realized that providing food service on-site increases daily productivity by five to seven percent per employee.

Raising the Floor
In addition to larger floorplates and more parking, raised access flooring was critically important to large corporate users because of increased technology needs. In fact, KDC’s survey indicated that more than 70 percent of the companies polled strongly preferred raised access flooring. This type of flooring saves money and makes it easier to route electrical, phone and data cabling, impacting telecommunications and technology-related expenses.

St. Paul Travelers Companies decided to consolidate four offices into the Intellicenter™ building in Houston, originally leasing 141,000 square feet and currently expanding by another 19,000 square feet.

The Intellicenters™ bring 14-inch raised access flooring to corporate users who don’t have the time or inclination to do a build-to-suit project. Although raised access flooring and under-floor air is more expensive than traditional flooring – it adds about $3 to $4 per square foot to the construction cost – the expense is quickly recouped in energy savings, usually within 12 to 18 months.

Because raised access flooring allows the air to be delivered under the floor, this method of air delivery is far more efficient than ceiling delivery and garners several points toward LEED certification. Studies have proven that under-floor air delivery uses 25 to 30 percent less energy to deliver 72-degree temperatures. It’s all a matter of physics, where cold air settles and hot air rises.

Under-floor air delivery is a big perk for employees because each workspace has its own vent and controls. Employees can modify the air flow to their own preferences. Studies have shown that systems that allow individual volume control positively impact productivity by five to 10 percent.

Scoping Out the Appropriate Markets
KDC’s Intellicenters™ are being developed across the U.S. to attract both fast-growing and innovative companies. KDC has identified 20 locations for Intellicenter™ buildings in Arizona, California, Colorado, Georgia, Florida, Nevada, North Carolina, Utah, South Carolina, Tennessee, Texas, Virginia and Washington. The markets were chosen by analyzing population and employment growth, demand from corporate users, quality of life, affordable housing and competitive construction prices.

Koll Development Company’s Intellicenters™ feature windows with a high-performance solar coating that reduces heat and interior glare, as well as sunshades that provide additional solar relief and light shelves that draw daylight into the workplace.

The first building, Intellicenter-Atlanta, is located in the rapidly growing suburb of Gwinnett County on a 14-acre site in the Huntcrest development. KDC chose Houston for its second Intellicenter. The 160,000-square-foot building, located in the Westway Park development, is leased to St. Paul Travelers Companies, Inc. St. Paul Travelers Companies originally leased 141,000 square feet and is currently adding another 19,000 square feet to fulfill their space needs. The company’s decision to consolidate four offices into the Intellicenter-Houston building may be further proof that corporate America’s attitude toward its real estate has shifted dramatically over the past few years.

“Finding a building that offered the right location in a safe and secure business park environment, the right amount of space and greater efficiencies is a challenge,” says Tom Maloney, an executive vice president and principal with The Staubach Company, which represents Travelers. “But at the end of the day, we felt comfortable with KDC’s Intellicenter™ product.”

KDC picked its hometown for the third Intellicenter building. Intelllicenter-Dallas, completed in spring 2007, is located in Regent Center, a KDC-developed 123-acre master-planned business park near Dallas Fort Worth International Airport. Regent Center houses several corporate headquarters including Citigroup, First Horizon, FedEx and Epsilon.

What’s in a Name? By branding its speculative buildings as Intellicenters™, KDC has set the buildings apart from traditional speculative office buildings. Although few office buildings are branded, KDC felt it was important tenants not see this building and think, “That’s just another office building.” The term Intellicenter™ was chosen to convey that the buildings are intelligent centers for employees and a revolution in design and functionality. Moreover, the Intellicenter™ brand distinguishes the projects as “green” buildings and sells the benefits of raised access flooring and under-floor air distribution, among other sustainable design attributes.