Reinvesting for the Future

In a tough market, strategic reinvestment in existing assets is often the most cost-effective way to bring new life to an aging workplace.

As vacancies rise and competition for tenants increases, building owners are finding new value in old assets. Reinvestment is often the most cost-effective approach to addressing the complicated demands of current tenants, while preparing the property for inevitable future market shifts.

“We can bring the energy back to a building,” says LPA Design Director Rick D’Amato. “And it’s often going to be more cost-effective than tearing something down or creating a new design that might be irrelevant in the near future.”

Today’s tenants have higher expectations, in terms of design and functionality. They demand great common spaces and functional outdoor amenities that make staff want to come to the office. Technology integration, acoustic designs and thoughtful lighting strategies are all prerequisites. Redesigns that don’t fit client expectations or meet changes in the market won’t be successful.

Owners and operators need to ask tough questions about their choices; not all investments will pay dividends. But strategic reinvestment is an opportunity to cost-effectively address the changing needs of a restless workforce and extend the life of the asset. Sustainability and wellness can be important design drivers. An increased brand identity and healthier spaces are all part of the value proposition.

“This isn’t about putting a checkmark on a marketing brochure and being able to tell a client that ‘yes, we have a basketball court,’” D’Amato says. “It’s about meeting individual needs in a collective space and creating long-term return-on-investment.”

A Research-Driven Approach
On several recent projects, LPA designers worked with owners and operators to develop reinvestment strategies to revitalize aging facilities. For each, the approach started with a fact-finding mission. LPA’s designers and researchers worked with clients to explore employees’ personality traits and the nature of their work, as well as their work styles. The goal was to develop an informed assessment of the impact of design options on the budget, productivity and the overall health and wellness of the workforce.

On any reinvestment project, maximizing the existing resources is always a top priority. Which assets aren’t being used to their potential? For many older projects, outdoor spaces are an untapped resource, and it’s where the reinvestment discussions often begin.

“Functional, varied, flexible outdoor spaces are not only a nice opportunity to connect to nature; if designed well, they can expand and enhance the usability of the interior space,” says LPA landscape architecture Design Director Rocio Gertler. “It is an effective way to incorporate the tenant’s personality and needs while providing a place that is as comfortable, inspiring and productive as working from home.”

In Plano, Texas, Spear Street Capital, the new owners of The Tennyson — a four-story office building that formerly served as the corporate headquarters for telecom giant Ericsson — worked with LPA designers and landscape architects to redevelop the ground floor and to find new value in the outdoor spaces. An underutilized patio area was repurposed into a functioning pavilion space with a customized shipping container, outdoor kitchen, bar area and shade structure for entertaining. Shaded spaces, firepits and heaters make the outdoors an option year-round, even in the Texas climate.

“We’ve been able to demonstrate to our Texas clients that you can create beautiful, effective indoor/outdoor environments,” says LPA Managing Director of Interiors Teresa Rodriguez. “The outdoor entertaining space has been a major selling feature to tenants and is used weekly.”

Inside The Tennyson, a speakeasy was rebranded, as well as a coffee shop, a fitness center with available aerobics room that connects to the outdoor spaces, and areas for wellness pop-ups. The amenities were carefully designed to provide the most “bang for the buck,” creating new options that fit the needs of the market.

“The market is tenant driven,” says LPA interior designer Lindsay Votel. “Amenities have to be functional, usable elements that tenants truly want but don’t necessarily want to invest in building out within their own lease spaces.”

Valued-Added Spaces
At a time when tenants have more bargaining power, it’s not enough to simply spruce up an entryway and rebrand a building. Tenants are looking for value-added spaces that extend their square footage and help support their workforce, in any way possible. Post-pandemic redesigns tended to center on flexibility and modularity, without necessarily meeting the needs of the workers, D’Amato says.

A purposeful approach that focuses on hospitality-level attention to design and comfort often offers the best combination of usability and long-term value. Comfortable, light-filled spaces never go out of style. At the same time, functionality is essential, as is designing collaboration spaces that can serve a variety of roles. Re-envisioning and redividing spaces can add connections to outdoor areas, as well as conferencing centers and advanced technology.

The hospitality-style amenities accommodate differing work styles, in addition to raising the value of a property, Gertler says.

“These kinds of spaces can serve as bridges for remote workers coming back to the office,” Gertler says. “They create a less sterile office environment that encourages collaboration and interaction.”

In Glendale, California, 801 North Brand, a downtown high-rise, underwent a reinvestment that included a redesigned lobby with hospitality-inspired elements, such as a 40-foot chandelier and the vertically lit wood wall. The ground floor of the ’80s-era building was transformed into a coworking space, with new conference rooms, workstations and collaborative environments. The LPA design also activated the extensive street frontage and atrium space, creating a 58,000-square-foot open-air plaza centered around a garden and public art display. Outdoor, shaded, Wi-Fi-enabled workstations with charging docks provide all-day functionality for tenants.

Even for relatively new buildings, a targeted investment can update projects for the modern market. In downtown Los Angeles, at the 550 South Hope Building, a 28-story structure completed in 1991, LPA’s design process reworked the staid tenant lounge and common spaces, adding a glass curtain wall, media wall and flexible seating, as well as a large mural. The outdoor areas were optimized with new varieties of seating, contemporary landscaping, and lighting and tech amenities to enable tenants to work outside or host meetings or events.

Looking to the Future
In many ways, a reinvestment strategy is about opportunities. Uninspired lobbies and common areas can be modernized. Strategic reinvestments that include sustainability upgrades, new systems and targeted retrofitting can all be part of a targeted strategy, adding years to a building’s life cycle. Spaces that go beyond code to help the environment increase the reputation of the company, provide healthier spaces for the tenants and deliver better investment returns. A focus on wellness can translate into a more positive, inspiring and productive environment.

A targeted reinvestment can also address the lifestyle and larger challenges of today’s workforce, D’Amato says. In taller urban buildings, reinvestments can take a more holistic approach, rethinking the role of the workplace, D’Amato says. In some cases, there are opportunities to create vertical communities, with floors developed around amenities that help workers in their daily lives. Mid-building floors can be turned into amenity spaces and opened with outdoor spaces.

Imagination is the only limit to developing more competitive and compelling projects. Ultimately, it’s about targeting dollars to develop more flexible and value-added leasing options. A smart reinvestment positions the property for the current market, while creating significant long-term value with features that will set the office space apart in a market likely to be crowded for many years to come.