GLOBAL TRENDS: LOCAL OPPORTUNITIES 2018 Trends Panel
September 13, 2018
ERIC GOLDSTEIN Executive Director King of Prussia District
TODAY’S PANELISTS
DAN HERSHBERG
LAUREN GILCHRIST
CEO & Co-Founder Workhorse Brewing Company
Sr. Vice President & Sr. Director of Research JLL
PETER M. GROLLMAN
LEA ANNE WELSH
Sr. Vice President, External Affairs Children’s Hospital of Philadelphia
COO Korman Communities President AVE
THANK YOU SPONSORS Annual Gold
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Moderator
NATALIE KOSTELNI Reporter Philadelphia Business Journal
DAN HERSHBERG CEO & Co-Founder Workhorse Brewing Company
LAUREN GILCHRIST Sr. Vice President & Sr. Director of Research JLL
Global trends: Thebigthemes impactingoffice Lauren Gilchrist Senior Vice President J LL Prepared for:
September 13, 2018
Streamlining and simplifying office leases
Conventional landlord $8,000 per desk
7,500-s.f. lease for $35.87 per s.f., with 2.5% annual escalations, and 2 months free, and $75 of their TI build-out cost covered, but the total cost and schedule of build-out are still unknown, plus they may have options to expand, but they come at an unknown cost, and they have to cover some of the utilities, and they must pay their own portion of the property taxes, which are dependent on the next city budget, and‌
2
Defning flexible space models
1
2
Coworking and serviced offices
Meeting, conferencing and training
Coworking and serviced offices
Meeting, conferencing and training includes
Flexible-term workspace includes
• Executive suites (e.g. Regus)
• Office meeting venues (e.g. Convene)
• Modular spec suites
• Coworking (e.g. WeWork, Industrious)
• Business clubs (e.g. Yale Club)
• Month-to-month leases
• Virtual office (e.g. Servcorp VO)
• Hotels
• Incubators/accelerators
• Subleases • Expansion/termination options
• Event spaces (e.g. museums, galleries) • Internal conference rooms
3 Flexible-term workspace
Tenant demand is increasingly shifting here
3
J LL forecasts a flexible space revolution
Present
Past
80% occupancy
20%
Future <5%*
30%
Flexible
Flexible
Tenant 80% demand is traditional increasingly shifting occupancy here 15%
60% traditional occupancy
10% vacant
vacant
vacant
40%
50%
Utilization
Utilization
80% Utilization
300+ s.f.
200+ s.f.
<150 s.f.
per person
per person
per person
*Approximately 2% of current U.S. office inventory is controlled by independent, third-party flexible office providers (spanning all operator types, fromtraditional executive office suites to coworking to incubators). Given industry shifts, flexible workspace and shared amenity spaces are projected to encompass up to 30% of the office market by 2030. 4
Cost effective, collaborative workplace strategies have shifted businesses to open plans and beyondâ&#x20AC;&#x201D;but how much is too much? Cellular space
Open plan
Open plan +Support
Hybrid mobility
Fully assigned offices and/ or high partition workstations
Fully assigned open plan workstations
Fully assigned open plan workstations and support space
Mix of unassigned and assigned workstations and support space
Full mobility Fully unassigned workstations and support space
350-300 s.f./person
300-250 s.f./person
250-200 s.f./person
200-150 s.f./person
150-100 s.f./person
Increasing choice, efficiency, flexibility and cultural transformation 5
Best in class workplaces Agility to expand/contract for all employees
78% reduction in storage – 35% savings on paper
Driven by internal mobility, not ‘work-at-home’
Provide for up to 10% growth in frst year with no new desks or churn cost
Target of 10-20% occupancy cost savings per year
Employee retention increased
92% don’t want to revert to desk ownership 6
BA+unemployment is down to 2.2%, far beyond full employment, creating ferce competition for talent Unemployment rate for bachelorâ&#x20AC;&#x2122;s degree holders (%)
6%
5%
4%
3%
2%
1%
0%
Source: JLL Research, Bureau of Labor Statistics
7
Urbanizing suburbs are the poster child for 21st century suburban development Themove to live/work/play is largely a result of workers wanting to reduce or eliminate bad commutes King of Prussia • Housing: More than 1,600 housing units completed in 2017-2018, with more planned • Retail: Walkable KOP Town Center delivered with 263,000 square feet of differentiated retail • Office: New office construction (Geoblue’s 110,000 s.f. building) • Multimodal: Preferred alignment identified for KOP rail connection, continuous trail system from Center City to Exton via KOP heading to completion
8
Federally designated Opportunity Zones will change the landscape of real estate investment if properly contextualized and implemented
J LL Philadelphia Research Lauren Gilchrist lauren.gilchrist@am.jll.com +1 215 399 1829
Š 2017 Jones Lang LaSalle IP, Inc. All rights reserved.
PETER M. GROLLMAN Sr. Vice President, External Affairs Childrenâ&#x20AC;&#x2122;s Hospital of Philadelphia
GLOBAL TRENDS: LOCAL OPPORTUNITIES KING OF PRUSSIA DISTRICT September 13, 2018
CHOP OVERVIEW • Nation’s first children’s hospital • Number of Beds: 561 • Outpatient Visits: 1.3 Million • Number of Employees: 15,500+ • Number of Trainees: 425 • Annual Revenue: $2.6 billion • Total enterprise is 6.2 million square feet • 50+ locations from New York to Lancaster PA, to Cape May NJ
CHOP CARE NETWORK-CARE THAT’S CLOSE TO HOME • Includes 31 primary care sites embedded in local communities • 250 providers • ~250,000 children • ~750,000 visits/year • Largest pediatric primary care market share in Philadelphia and surrounding counties
CHOP NETWORK MAP
HEALTHCARE TRENDS • Affordable Care Act • Medicaid • Research Innovation, Telemedicine, Access • Consumerism
CHOP KING OF PRUSSIA HOSPITAL • Opening in 2021 • 52 inpatient beds • 16-bed pediatric intensive care unit (PICU) • 24/7, 20-bay pediatric emergency department • 4 operating rooms • Full-service Radiology Department
YOUR COMMUNITY – OUR COMMUNITY • King of Prussia Mall Play Area • CHOP Cares • Wawa Volunteer Center • CHOP Minds Matter Concussion Care
KING OF PRUSSIA MALL PLAY AREA • King of Prussia Mall attracts visitors well beyond the metropolitan region • More than 24 million shoppers annually • Approximately 40% have kids
LEA ANNE WELSH COO Korman Communities President AVE
THE INFLUENCE OF TECHNOLOGY · Mobile First · Want everything at the push of a button · Booking extended stay sight-unseen · Reliant on reviews (what their networks is saying) · Social Media is the new store front
ERIC GOLDSTEIN Executive Director King of Prussia District
TODAY’S PANELISTS
DAN HERSHBERG
LAUREN GILCHRIST
CEO & Co-Founder Workhorse Brewing Company
Sr. Vice President & Sr. Director of Research JLL
PETER M. GROLLMAN
LEA ANNE WELSH
Sr. Vice President, External Affairs Children’s Hospital of Philadelphia
COO Korman Communities President AVE
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KOP BEERFEST ROYALE October 4 & 6 $10 off Saturday Sessions GLOBAL10 $15 off Donnerstag GLOBAL15
GLOBAL TRENDS: LOCAL OPPORTUNITIES 2018 Trends Panel
September 13, 2018