How to Reposition a Building to Meet Changing Expectations

Fall 2019 Issue
By: David Yuan, Robert Mankin and Chris Beza
The recent renewal of Two Union Square in Seattle created public spaces that serve many of the same functions as a tech workplace but with a look and feel that is true to the building’s brand and position in the market. © NBBJ/Sean Airhart

Whether it’s replacing worn materials or an intensive intervention, architectural updates can enhance the value of a property.

As buildings age, they often need to be updated to attract and retain tenants. The scope of a renewal can vary widely from building to building, but keeping a few important factors in mind can position a building for continued success for years to come.

Why Renewal Is Necessary

As recently as five years ago, a “tech” building meant something very different from a financial or legal services building. Tech companies often provided a host of amenities that encouraged interaction, including informal meeting areas, maker spaces, restaurants and retail. But now the distinction between financial and tech buildings is going away — traditional business services like law and accounting firms expect the amenities long associated with tech companies.

The current workforce is also more inclined to work anywhere, whether from their desk or an impromptu break-out space or even a coffee shop. At the same time, WeWork and other coworking companies rose up to absorb excess office space, giving people an experience very different from a corporate office.

Moreover, renewal can be an effective strategy during an economic downturn as a low-cost, high-impact alternative to building from the ground up.

The Scope of Renewal

There are several reasons why a building owner would want to renew a property. Most obviously, a building may need upgrades if it is having difficulty attracting or retaining tenants. On the other hand, some owners may undertake a renewal proactively if a building is well-leased but is beginning to look dated and tired, if the property will soon compete with new Class A buildings under construction nearby, or if tenant mixes are changing. Other renewals occur when a building is sold and the new owner wants to bring it in line with their own brand vision.

Each renewal varies, but most can be categorized according to degree of intensity:

Light touch. Some renewals occur as materials and finishes wear out and need to be replaced. The interior may gradually change as materials are swapped out, but typically the level of intervention is small. The lobby and arcade of 85 Broad in Lower Manhattan provide a good example of this. New finishes, wayfinding, reception desks and public art impart a more contemporary feeling to a building that was otherwise largely untouched since it was first built in the 1980s.

Rebrand. A rebrand is a more ambitious renewal aimed at changing the perception of a building. This might include changes to part of the facade, the amenities and retailers, the elevator cabs, and the lobby and how it interacts with the greater urban environment. These tend to happen when a landlord first acquires a new property, but they may also be initiated by a long-term owner. Tishman Speyer, for example, added a new outdoor landscape and entrance pavilion to 407 North Maple in Beverly Hills so workers could take advantage of the indoor-outdoor work lifestyle made possible by the mild Southern California climate.

Intensive intervention. Many historic buildings are significantly out of date and require extensive upgrades. For example, an older structure might need new mechanical systems or windows or even a new facade to meet more stringent energy codes. Insufficient vertical transportation could require relocation. Life safety measures such as flood protection or seismic retrofits might need to be built. Entire floors could be added. The renewal of Seattle’s Maritime Building implemented all of these strategies; in response, interactive game developer Big Fish leased the entire building before construction was completed.

Factors for Success

For a successful renewal project, keep these important factors in mind:

The building’s established brand. Every building has an existing position in the marketplace, and the most successful renewals build on that position. A contemporary intervention in a classic midcentury building, for instance, might feel foreign to that building’s character. The renewal of 177 Huntington, an I. M. Pei-designed landmark in Boston, focused on activating the lobby with new furnishings, finishes and a cafe, rather than alterations to the building’s bold architectural character.

The building’s existing condition. In addition to structural or mechanical upgrades, renewing an older building may require the remediation of hazardous materials like asbestos, lead or PCBs. Sometimes the cost of renewing a building to meet the needs of the market exceeds the cost of demolition and new construction. In that case, it makes more sense to start over. At the same time, older buildings often have historic texture or cultural importance that many tenants value and are worth preserving.

A company’s business model and brand. For core real estate investments intended to provide a steady income stream, it would not make sense to invest in a major overhaul. Value-add or opportunistic investments, however, acquire a building for the express purpose of making a significant investment and increasing its value. Also, keep in mind a company’s brand vision for the look and feel of a renewal project — are the properties edgy and creative, or subtle and sophisticated? This also extends to corporate workplaces. How can a renewed building better connect employees to the company’s brand and mission?

Desired tenants. Although nearly every tenant expects more amenities, the exact mix and appearance of amenities that appeal to potential tenants may vary. For instance, the recent renewal of Two Union Square in Seattle created public spaces that perform many of the same functions as a tech workplace — with areas for interaction and gathering — but with a look and feel that is true to the building’s brand and position in the market. As a result, the space appeals to a variety of tenants, from brokerage firms like JLL to tech firms like Apple.

Existing tenants. It’s difficult to renovate a building while it’s occupied, so it’s essential to align tenants’ expectations regarding the extent and duration of any disruptions. Communication is key. Many owners will deliver presentations to tenants nearing the end of their leases to show why the renovation makes it worthwhile to stay. Some tenants at 1201 Third Avenue in Seattle, for instance, initially disapproved of the contemporary aesthetic of the renewed lobby until they understood the benefits of a more open building with new amenities.

The urban context. The ground floor,  and even some of the floors above,  can function as a hub for the surrounding neighborhood. Is a property near a hotel, a convention center, an entertainment district or other offices? Think about how it can contribute to the life of those surrounding uses, perhaps in its retail mix, food and beverage, coworking space or a public plaza where people can congregate.

Programming. Some landlords are hiring coordinators who program amenity areas with events, whether for tenants only or the public at large. “Experience design” and environmental graphics — encompassing murals and public art, music, virtual reality and augmented reality, and more — can also attract tenants and visitors. Think about how a space can change throughout the day, month or year, and provide reasons for people to visit again and again with special events, pop-ups or interactive spaces.

Amenities for All

Every building type has seen a push for greater density, whether in the size and number of units in a residential high-rise, or the employee headcount in an office space, or even retail store footprints. And as the amount of dedicated space per person decreases, people will increasingly need “second places” in which to live and work.

As a result, amenities are getting more elaborate: residential buildings offer gyms, roof decks, retail, coworking and more; workplaces include a wider variety of break-out spaces for heads-down work or group collaboration; retail adopts an increasingly experience-based showroom model, with less in-store space devoted to stock and more attention paid to the digital brand and website.

For architects, what’s exciting about this shift is that physical space, increasingly, is considered an asset and not overhead. Improved space can help employees work smarter, more creatively and more healthily. The most successful renewals will be those that enable people to meet the changing expectations for work and life.

David Yuan and Robert Mankin are partners at NBBJ and Chris Beza is a senior associate at NBBJ, a global architecture firm.