However, from a real estate perspective, I can’t help but ask if this is a smart design decision or is it simply a vanity project? While it’s cool now, what happens in the future?
Over the last few years, many of our clients have focused on maximizing their flexibility. Too many companies found themselves with large, antiquated facilities with very little hope of disposing these properties whether it was a long-term lease or an owned facility. Companies like AT&T, Lucent, and BASF all shed large facilities in New Jersey at prices well below replacement just to get the buildings off the books.
Workplace standards have also changed and will continue to change. Technology now provides us with the ability to collaborate remotely, working on the same document that is housed on a cloud server simultaneously. This will have an impact how certain companies utilize office facilities going forward. Many are providing work at home solutions, desk sharing for sales staff and less personal space for each employee. Once a company changes its standards, it's difficult, and sometimes impossible, to renovate while occupying the space.
Large single-tenant buildings are also difficult to divide if the headcount is cut and excess space exists. The cost of creating a common lobby, multi-tenant corridors and other common areas may outweigh the income from a potential sublease leaving companies to simply sit with blocks of vacant space, sometimes full floors, within their buildings.
I am sure there are many reasons why LucasFilm chose the Sandcrawler design, specifically in Singapore. However, the design certainly appears to be challenging for conversion to a multi-tenant building given the horseshoe shape of the floors. At some point, the company’s needs will change. And once they decide they need less space (or no space at all), they may find that their hip and cool Sandcrawler building has become the dreaded White Elephant, an obsolete building that no one else can (or wants to) occupy.
We are urging our clients to not only think about the immediate impact of new facilities, but also consider exit strategies as well. Flexibility might not lend itself to a cool design, but it is certainly responsible in the long run.