Going communal
Harrison Kruse 
Senior associate, CBRE|Hubbell Commercial

Please identify one trend in your area to watch in the upcoming year.
While Greater Des Moines’ growth continues to follow the trends of many other similar-sized cities throughout the Midwest, its development has partly been driven by affordable and plentiful land, which encourages expansions into the outside city limits into suburbs. These areas are favorable for massive retail buildings, without interrupting the basic flow of office space and housing communities.

Could you please explain the impact of that trend?
Most recently, the focus is on the town center and mixed-use concepts, which meld work, life and fun in one place, usually within a small geographical area, creating its own unique neighborhood. This concept seems to be a mutual desire for both the millennial and baby boomer generations. These communal concepts have developed as a response to what works best for individual human desires. Oftentimes development is influenced by popular trends and costs, rather than consideration of human desires and human needs, but that tendency has faded over recent years. For office developers and building owners looking to maximize occupancy in their asset, offering extra services and convenience are becoming a primary consideration in real estate design and development.

Today, communal concepts are also a selling point. These collaborative spaces are important to employers and developers who are looking to provide amenities within their office buildings to recruit and retain employees. Low unemployment and competition for qualified workers place greater emphasis on providing convenience of services, which can make the employee’s life easier and, in some cases, healthier. To recruit and maintain people or make a property more desirable, not only do developers need to provide exceptional amenities, but also examine the neighborhood and surrounding services to complete the communal environment. Recent studies on worker well-being show that productivity, engagement and collaboration, culture, and satisfaction with their office environment directly correlates with commute time, worker satisfaction and health. For example, employees that have shorter commute times are more apt to exercise. According to Athletic Business, a 40-year-old publication dedicated to the sports and fitness industry, corporate fitness facilities “increase productivity, improve employee morale, and decrease absenteeism.”

Solely focusing on current trends may miss the mark. However, development and design that focuses on providing for employee needs has and will continue to have greater potential to provide profitability and satisfaction to employers, developers and building owners.

 

Opportunity in Opportunity Zones
Tim Bratvold 
Director of business development, Estes Construction

Please identify one trend in your area to watch in the upcoming year.
Opportunity Zones that were established by the 2017 Tax Cut and Jobs Act are starting to gain traction. Investor interest is high around Opportunity Zones due to the exchange for attractive tax breaks that come with the investment. The tax incentive drives economic development in underserved communities, thus benefiting individuals and communities. With the right development projects, Opportunity Zones have the potential to catapult development and provide exponential growth in specified areas of our community. At Estes Construction, we seek to provide a great client experience for all stakeholders involved in revitalizing the Opportunity Zones by advocating, connecting investors with landowners and delivering on promises.
 
Could you please explain the impact of that trend?
Opportunity Zones have the ability to provide specified neighborhoods with an incentive package that attracts new developments in these areas. The incentive is created through a tax vehicle that allows taxpayers to reinvest unrealized capital gains into opportunity funds that then support Opportunity Zone developments. A majority of the Opportunity Zones that have been selected would not have otherwise seen private investments and development projects come to fruition due to development costs being high in an area where strong rental rates would be difficult to achieve. There is a need for the development to “do well,” which in return creates a need for an integrated project team to be involved early on to balance the project design and budget. The Opportunity Zone program will provide the potential to rejuvenate neighborhoods while spurring a positive economic wave of work for construction trades and suppliers. I believe this program will bridge the gap between our strongest neighborhoods and our underserved neighborhoods to strengthen the overall quality of life in our community.
 
What’s one trend to watch in the next 10 years?
I believe that within the next 10 years, we will see a significant advancement and integration of technology in construction. A big advancement I foresee is how project information is transitioned from design to construction. Rather than designing in 3D, putting the design on 2D (paper) and building it in 3D, the construction and design industry will identify and implement efficiencies and new technology to streamline this function. People will demand to experience their building prior to building it, perhaps through VR or another system yet to hit mainstream. The technology within buildings will help with sustainability via automatic lights and the heating and cooling of areas where people are accommodating new working routines and virtual connection. Truly, the possibilities are yet to be imagined.