Dwight Hanson launched his finance career amid walls and bulky file cabinets, back when Internet conferencing and mobile phones were things of the future and the “cloud” was still a white puff in the sky.
So imagine the skepticism when the 55-year-old's employer moved to a wide-open, collaborative work site where laptops reigned, conversations overlapped and flexible space allowed for pingpong and midafternoon yoga classes. Sojern found that new home in a converted restaurant and dance club that is about the same size as the travel data firm's previous home yet fits nearly twice as many workers.
A year later, Hanson, who kids that he was pulled there dragging his feet, now has become a fan of what commercial brokers say is a growing trend in the Omaha area office market — open and shared work environments that squeeze in more people per square foot. Such configurations promote interaction while taking advantage of modern technology that requires less physical space.
“I love it,” Hanson, Sojern's vice president of finance, said of the office at 810 S. 169th St. “We're basically shoulder to shoulder. Everybody has a better sense of what everybody else is doing and can provide input.”
While the flexible open-air workplace is not new to media and big-city technology firms, area real estate experts say it's catching on more in the Omaha area, and with a variety of local businesses. The evolution of the workspace is expected to create long-term savings for businesses, but it comes with challenges as well.
An obvious challenge, said T.J. Twit of the Lund Co., is the scramble for parking spots around buildings designed for more traditional one-person-one-office layouts. To stay competitive, some landlords may be forced to offset the increased demand by turning old office space into commons areas such as cafeterias or an entertainment-based amenity.
Investors Realty's J.P. Raynor said the trend has delivered a financial blow to those building owners, as companies aren't as likely to drastically increase their footprint when they move.
In 2013, he noted, the number of lease transactions of 1,000 square feet or more was up from 75 the year before to 117, but the total square footage leased was down from 860,000 to 777,000. Raynor said that means that, on average, companies are renting smaller spaces, which has upped competition among landlords.
Scott Brown of Quantum Real Estate cited a move he handled last year for a law firm that downsized individual offices from 250 square feet each to 144 square feet. Technology, he said, eliminated the need for large desks and bookshelves.
“Computers are smaller,” Brown said. “Hard files are eliminated. What you're seeing is definitely a much more efficient, compact office with the same use and functionality.”
Though physical space needs may be shrinking, not everyone is onboard with giving up walls and privacy altogether. Twit said his employer, for example, settled on a “hybrid” of sorts when renovating a Regency building for the Lund Co.'s new headquarters. “We have smaller offices with efficient furniture layouts — but everybody has a door.”
Omaha's CB Richard Ellis/Mega commercial real estate plans to follow the Los Angeles corporate office into a more open, break-down-the-walls environment — to a degree, said President Bennett Ginsberg. Cubicle walls likely will be lowered and certain walls eliminated, allowing for workforce growth, he said, but perimeter offices will be retained.
Downsizing for some businesses doesn't necessarily mean lesser rent. Financial Brokerage Inc., for example, shrank from 15,000 square feet to 10,000 square feet, essentially eliminating a supply area. But it upgraded to a better spot and building near 171st and Pacific Streets, said CEO Joleen Misek.
A few private offices remain, but most workstations are in an open environment with low cubicle walls. “Now it is a much broader team approach,” said Misek, whose staff moved into its new office this week.
Even with the shift toward condensed work areas, more office space was leased overall in the Omaha area than was vacated, according to the latest market report by Xceligent. Absorption was driven in large part by a few big leases, including the recent completion of the 131,000-square-foot downtown headquarters for global commodities trading firm Gavilon, which moved out of smaller digs on the downtown ConAgra campus.
Other large transactions that helped 2013 leasing activity, according to Colliers International, included Kiewit and Stillwater Insurance Co., which each expanded by about 21,000 square feet at the 12701 I Street building. Union Pacific leased about 14,000 square feet at Central Park Plaza; Nelnet expanded by 13,000 square feet at Westwood Plaza; Nebraska Wesleyan leased 12,600 square feet at First National Bank Building; and Ubiquity Global Services leased about 12,000 square feet at North Park VII.
An expanding Treetop Ventures, a startup consulting firm that Sojern's Hanson helped found, also relocated its administrative offices in October, going from less than 5,000 square feet near 144th Street and West Dodge Road to more than 8,000 in the Miracle Hills area. Partner Tom Boje said Treetop opted for a space heavy on open areas and low cubicles.
Treetop veteran Susan Baron still misses the quiet at the old place but can turn to noise-deadening earphones or private “phone booth” offices for confidential conversations.
Boje said he, too, was hesitant at first. But he now thinks that he and his partner, who sit next to each other, get more done in their shared space. “The days of cubicles and one person per office are gone — just gone,” he said, adding that makes the cost per body cheaper.
Treetop opens its work site to startup companies, including D3 Banking, a creator of digital banking solutions whose programmers need minimal furnishings beyond computers.
Chad Stansbury has a cellphone within reach in case family calls but communicates with colleagues via online conference and video chat tools. A yellow legal pad sits nearby, but he mostly turns to the white board, which he can erase at the end of the day. Rarely does he print documents, with cloud-based storage so accessible.
“We travel light,” said Stansbury.
Another of Treetop's incubator firms, Prairie Cloudware, is moving into an even more flexible 6,600-square-foot suite across the hall at 11837 Miracle Hills Drive. Eight employees soon will grow to 20 and eventually to 40, said CEO Kevin Kammer.
Rather than stationary desks, the team members will work on tables with wheels that can be rearranged or raised for stand-up huddles. Kammer will work among the troops.
At Sojern, San Francisco-based CEO Mark Rabe told consultants he wanted the new Omaha home to be a cool site that would help recruit up-and-coming talent, Hanson recalled.
After checking out numerous places and surveying employees, the firm settled on the 10,000-square-foot former Prestige World Class restaurant and dance club overlooking Pacific Springs Golf Course.
A five-month total remodel replaced the old dining area with a network of computer work stations that allow for impromptu conversations.
A kitchen stocked with snacks and drinks encourages people to grab their laptop and work while eating a bowl of oatmeal. A shuffleboard and pingpong table, 80-inch TV and carpeted area for yoga allow stress outlets or a social setting where employees still might chat about the job.
“We wanted a place where people wanted to be in the office,” said Vice President Brent Brummer. Sojern leases the building from Lanoha Development.
Marcus Madler came from federal government and bank jobs. He said Sojern's outdoor grilling area, Friday beer hour and team-friendly environment improve productivity. “It helps morale,” he said.
Co-worker Brian Smith, who came from a windowless city finance office, said many technology professionals feel they're always on the job. “So it's nice to take a mental break,” he said, and not feel as though someone is questioning your work ethic.