Banker & Tradesman: Redesigning Office Space for COVID-19 Compliance

Architect, Proptech Firm Team Up on 3D Tours

A Boston proptech company is partnering with a Toronto startup on a new service to redesign office space on the fly to comply with social distancing recommendations. 

Two proptech companies began discussing a partnership on 3D office visualizations last fall, unaware that a looming viral pandemic would disrupt the rules of commercial real estate.

Boston-based Building Engines has a vast trove of data on the layout of nearly 30,000 commercial buildings in the U.S. and Canada. FastOffice, a Toronto startup, offers software that can turn building diagrams into 3D online presentations for virtual tours in under a day.

The partnership launched in late April, with a wrinkle designed to reflect the new priorities of office tenants in the COVID-19 era. The “Safer Spaces” software enables tenants to redesign and visualize offices to maintain 6-foot separation between workstations when non-essential businesses are cleared to reopen.

“Everybody agrees the re-occupancy and use of space will be different,” said Scott Sidman, Building Engines’ executive vice president of business and corporate development. “This may work out where people need more space to spread people out. We’re hearing landlords are more optimistic about that scenario.”

Competing Future Scenarios

The jury is still out on whether the widespread shift to the work-from-home model during the pandemic will lead to permanent changes in commercial real estate, including diminishing demand for office space.

In a survey of real estate executives conducted April 8-13 by nonprofit researchers CoreNet Global, 66 percent of respondents said they now have a more positive view of working from home following the forced experiment. And 49 percent said they will offer the option of remote working in the future.

Many companies have indicated they will bring back employees in phases, and some architects predict offices’ capacity could be reduced by up to 50 percent. Commercial landlords are assessing what it means for future occupancy rates and rent streams.

“Some users will have a portion of their employees work remotely, and some will require more space,” Boston Properties CEO Owen Thomas said during a conference call last week to discuss the company’s first-quarter earnings.

Founded in 2000, Building Engines originally focused on bringing building operations into the internet age. Its programs enabled landlords, tenants and contractors to communicate in real time on maintenance requests and project management, essentially acting as “the operating system for the building,” Sidman said. Most of Building Engines’ clients are owners and third-party property managers, including such major Boston landlords as Beacon Capital and Synergy Investments. It added its virtual tour capabilities following the acquisition of Real Data Management, a space visualization software company, in May 2019.

Building Engines enhanced its visualization technology through the partnership with FastOffice, founded in 2019 by Toronto architect Colin Graham to disrupt the office design industry.

The firm takes two-dimensional floor plan PDFs and converts them into 3D visualizations including potential furniture configurations, usually in less than a day. Tenants can view the results on a web browser and hold a videoconference with an architect. Landlords pay FastOffice a monthly fee equating to approximately one cent for each square foot of vacancy they’re marketing, such as $100 for spaces between 5,000 and 10,000 square feet.

In-Person Tours Paused

In light of the current social distancing recommendations, the companies in late April launched the “Safer Spaces” tool which allows tenants to reconfigure space and furniture layouts.

“The density they can achieve in their space is very much up in the air,” Graham said. “For the most part, they are asking about adding or deleting an office, shifting around phone booths and workstations and changing the size of workstations. Just recently, we’ve started seeing a lot of tenants looking for solutions on how to get back to work.”

Building Engines’ Sidman said the companies have executed one deal since the service launched and have had talks with 20 other clients in the past week.

In-person property tours have taken a breather in recent weeks as tenants pause to assess the economic climate, although leases that have been in negotiation since before the health emergency usually are being signed, said Debra Stevens, president of The Stevens Group, a Boston-based tenant representation brokerage for office and industrial properties.

But Stevens is skeptical that virtual property tours will replace in-person visits. The brokerage typically advises clients to tour three of their final building choices.

“A good broker is going to be able to smell and taste and feel whether or not the space is going to be safe and adequate for the client,” Stevens said. “When you walk through the space, you can look at the ceiling tiles, the sprinkler heads, the flooring. A lot of that can be fooled with some of those videos, so I would get to the first stage with the videos, but never to the [selection] stage.”

Original article contributed  by: Banker & Tradesman