Corporate Real Estate’s Role as an “Engine of Growth” in Community Development

In doing some research for a recently published post about the midterm election’s impact on the economy and corporate real estate, I came across some fascinating information about the evolving life needs and desires of today’s workforce.

Given the hopeful assumption the economy is showing signs of recovery (based on recent indicators of consecutive months of profitability, stock market gains and increases in consumer spending) it may mean that companies will begin hiring new employees.

In order to be competitive to retain and recruit top talent, companies would be wise to respond to the new dynamics employees are interested to find in the organizations in which they work. Office environments that incorporate highly productive work spaces located in close proximity to amenities that cater to the quality of life of the individual. Amenities such as healthy eating choices, recreational wellness centers/health clubs, residential developments, and convenient retail offerings all located within walk-able proximity vs. car-dependent locations.

In this way, corporate tenants in office parks and urban developments can take on the role as ‘anchor retailers in a mall’ where they could seed mixed use, ‘towne centre style’ developments. These collections of newly developed corporate office buildings or renovated urban settings could generate lifestyle-related development critical to attracting highly desirable employees. Expanding companies can offer communities the impetus to trigger growth and development while creating workplaces on trend with the “office of the future.”

This type of development would create the traditional ‘win-win-win’ scenarios of: a win for the company in creating employee-friendly environments to retain/attract top talent where productivity is fostered; a win for the employee who can satisfy their desire for live/work/play areas in close proximity with one another; and, wins for communities starving for the revenue that comes from stimulating new development or revitalizing existing areas.

The key to making this type of development and ‘engine of growth’ a success is the collaboration of all relevant stakeholders. The lack of investment capital to fund projects for a commercial developer that can bring together all of the components may not exist just yet but, through private/public collaboration of office developers, retailers, commercial developers, and public officials (to provide monies for the infrastructure and assistance to qualified companies) the private sector companies could play an pivotal role to trigger self sustaining economic and community growth.

Progressive CRE professionals could serve as their company’s representative in ‘towne centre’ development and leverage the amenities being created by other entities. One example might be a company who wants to develop a health club for their employees may reach out to existing providers who might be interested in locating a facility in near proximity to their location.

The axiom in economic development is that every private sector manufacturing, technology or services related job can create 4-5 additional jobs in the retail/restaurant industry. This would mean that collaborative developments could become the platform for meaningful growth and vitality in urban districts and communities.

But, it starts with a company who has the vision and desire to take its place in a community and be the ‘engine of growth.’

What are your thoughts about how corporate real estate’s role in stimulating economic growth?

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3 Responses to Corporate Real Estate’s Role as an “Engine of Growth” in Community Development

  1. Jim Meredith says:

    Somewhere near the bottom of conventional practice in CRE site search is the formula that reads something on the order of, “I’ll bring you these jobs, if you’ll give me those tax benefits.” It has been very rare, it seems, that CRE leaders engage a conversation like the one you suggest – “A place for our offices is only one part of the spectrum of interests we have of being a responsible corporate citizen and acting as a catalyst for community life style quality, economic health and long-term sustainability.”

    As we begin to understand and respond to new ways of working (Gartner’s “work swarms,” for example), it seems that the “office” is no longer a single place. Work is done everywhere, and new forms of will require new forms of work places. The workspace must now, in other words, be considered as a community of places.

    Your suggestion that the CRE professional “serve as their company’s representative in ‘towne centre’ development and leverage the amenities being created by other entities” is a great idea, and one that I’d suggest expanding a bit through development innovation. That is, beyond the amenities that we normally think about when considering life/work/play mixes, can we inspire developers to innovate around the emerging forms of work and generate a “third party” sort of workplace?

    I do not think that Starbuck’s, or Regus, or incubators are the accurate or sustainable models for this. An entirely different model, fostered by CRE in recognition of the internal limitations on its achievement but fully acceptable when delivered externally by others, could be a further catalyst for community growth and quality.

    • thanks a lot for your observations…this post was inspired by a situation of which I’m directly involved and believe, confidently, that companies can play an important role to stimulate community development. While not their responsibility there are inherent benefits for companies if a collaborative development can occur in which they can participate and benefit.

  2. (The following is a comment posted by Art Seaborne in a LinkedIn Discussion Group on the same topic)

    Corporations are missing a huge opportunity to transform their excess real estate into investment currency to help create and support new American entrepreneurs.

    Recent reports of an 18% vacancy rate in Class A office buildings might suggest that a building owner could consider offering space to a local company in exchange for equity in the enterprise. Seems like a limited downside risk (vacant space), with an unlimited upside potential. Vacant office space for stock in Google, Facebook or that Twitter thing when they first got started would have been an interesting investment.

    Same thing with other forms of Alternative Capital, such as the 40% of unsold hotel rooms last night or the 15% of unsold airlines seats on today’s airlines. Then there is all the excess Radio, TV, Newspaper or Magazine ads that went unsold. All of these excess capacities, along with vacant or excess real estate can be monitized as investment currency to support new American Business creation.

    Chaos creates Opportunities! What’s the Possibility?

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