The other day I had a coffee meeting with an architect who has a large interior design section in his firm, and we discussed this new trend towards open offices and shared workspaces. Suffice it to say he wasn’t thrilled with this new direction, and his bemoaning was still on my mind which reminded me of this article that bubbled up recently from the Washington Post on how an open office floor plan potentially kills productivity in the office.
From his architect’s standpoint, the logic was clear: By eliminating the fixed costs of physical build-out, furniture, etc., those savings will translate into a tenant’s lower overhead and lower effective rental rate.
However, what this article is saying the firm doesn't often realize those savings, and in fact, the very thing that is most costly to office tenants – labor cost per square foot – has proven to be significantly compromised in the open office.
Jones Lang Lasalle has a “3/30/300” model which says that – on average – office tenants will spend $3 PSF on utilities, $30 PSF on rent, and $300 PSF on labor. So, then by going to the open office is a company helping or harming it's most expensive real asset in the workplace?
Certainly, the account in this article is anecdotal, but the fact is that more and more office spaces look to join this open-office trend with hopes of promoting an idea of collaborative productivity and saving money. They do this while bypassing a growing inventory of value-priced traditional "Class A" office spaces in downtowns and city cores. What this means to those in search of office space for a start-up, new firm, etc. is that a growing value is found in traditional office setups and may even boost productivity from the most costly segment of any office operation.