Western Real Estate Business

JUN 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

Issue link: https://westernrealestatebusiness.epubxp.com/i/993830

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Page 36 of 50

34 • June 2018 • Western Real Estate Business www.REBusinessOnline.com TECHNOLOGY AND THE MODERN WORKSPACE Companies may have their own technology and IT infrastructure needs, but supporting those needs falls to the office space developers, investors, builders and management teams. From project management to data storage and even virtual reality tours for far-away companies, the relationship between tech and office is tighter than ever thanks to the digital revolution. Hunting for new office space? Locat- ing and then reno- vating your dream office space can be a daunting and all- encompassing task. From the very first site visit to the final walk-through, com- mercial real estate clients are not only debating the ben- efits versus downsides of the space itself, but how they can best integrate their furniture concept, work culture and IT needs into the commercial space. Even if the office space selec- tion is easy, the to-do list feels daunt- ing and overwhelming long before the lease is signed, and mismanagement can cost the client time, employee pro- ductivity and unnecessary money. The Project Management Institute (PMI) notes that for every $1 billion invested in the U.S., $122 million is wasted due to lacking project performance. Introducing an office build project manager into the process can assist both the client and the commercial broker through the deal and office build-out. Bringing in an office proj- ect manager early in the office space selection and evaluation process can allow a client's office build project to run more smoothly and more cost ef- fectively. These project managers can also review the lease and provide insight into the constructability and space planning of a site, which can not only aid brokers in closing deals, but can also assist in site selection. Project managers can also foster the ongoing collaborative effort toward es- tablishing a realistic project budget. The project manager can create a prelimi- nary budget, keeping in mind the cli- ent's needs and the space requirements. That budget can then be re-worked as space options are reviewed and the proj- ect scope becomes more clearly defined. Project managers can help brokers edu- cate their clients on whether a space is right for them, as well as set reasonable budget expectations. These principles are best explained through a real-life example. One recent office tenant was in the midst of review- ing space options to downsize both their office footprint and their over- head costs. While the task of reviewing space options and deliberating how to downsize is daunting enough, this cli- ent also had complicated IT and power needs. Thankfully, this broker thought to bring a project manager into the fold early on. A feasible office space had presented itself, but the building owner had concerns about both the tenant's potential power usage and the tenant's needs for larger forensic and server locations. The broker kept the ball rolling with alternative space options, while the project manager re- viewed the power needs for the new space and set up power monitoring for one week. The project manager's comprehensive report resulted in the acceptance of the lease application for the tenant in their ideal office space, bringing optimal results to the tenant, landlord and broker. Project managers create a positive environment where all can succeed. The benefits start at the site selection process, but do not stop there. Project managers source contractors, consul- tants and vendors to identity red flags and opportunities early on. They will work with the tenant and broker from the beginning to establish a positive working relationship with the land- lord, allowing both the landlord and tenant to feel confident the project is in good hands. Project managers will then generate a scope of work with all team members, establish a detailed project schedule, and manage budgets and vendors to bring the project to suc- cessful completion. Price Waterhouse Coopers cites that 97 percent of orga- nizations believe project management is critical to business performance and organizational success. Commercial brokers and project managers work- ing collaboratively bring tenants their ideal office space with half the hassle and on budget. Opportunities are lim- itless with this ideal partnership. Felson A clear majority of Americans now own smartphones — 77 percent of the population to be exact, according to Pew Research. Only 35 percent of people in 2011 had access to the devic- es we now routinely use to stream video, post photos online and collab- orate remotely with our colleagues. America's enterprises are also taking part in the Internet of Things (IoT) revolution. Once a futuristic concept, the smart office is becoming reality. From voice-controlled assistants like Amazon's Alexa for Business to wear- able devices and connected cars, com- panies are increasingly adopting IoT technology to improve employee effi- ciency and cut costs. With a growing number of offices turning to integrated IoT solutions, it is easy to lose sight of one fact: all that activity generates massive amounts of data that need to be physically colocated on dedicated servers. The Internet relies on the roughly 3 million data centers across the U.S. In Los Ange- les, however, the amount of data being generated these days is putting a new strain on many of the city's data centers. The Los Angeles Data Economy IoT developers, streaming content providers, and enterprises that use a myriad of IoT and cloud-based ser- vices comprise Los Angeles' diverse and growing data economy. From home security and smart water me- ters to motion sensors and smart ther- mostats, our daily lives have become more data-intensive than ever. Los Angeles is also part of a partnership between tech companies and the Uni- versity of Southern California (USC) that aims to transform the area into a smart city with a fully integrated IoT system. City authorities will soon be deploying a wide array of internet- connected devices to take on every- thing from traffic flow improvements to reductions in crime. IoT and America's increased use of mobile applications are challeng- ing traditional reliance on central- ized data centers where enterprises colocate all their IT equipment. To- day's smart devices require real-time analytics and computing that legacy infrastructure has difficulties accom- modating. As a result, data storage is gradually dispersing toward the edge, which is the area where the cloud and end-users physically meet. By allow- ing data to be processed and analyzed close to devices, edge data centers en- able faster deployment of IoT projects and ensure a device's timely and dy- namic response to its user. From a business perspective, Gart- ner reports that only about 10 percent of all enterprise data is created and processed outside of traditional, cen- tralized data centers. However, by 2020, this figure will grow to 50 per- cent. As a result, the need for ample edge colocation space in Los Angeles is a larger priority than ever before, making it an attractive market for data center developers to invest. Unrelenting Demand for Data Center Space The U.S. data center sector is set to triple in growth by 2020. This is no surprise for Rising Realty Partners. Rather, it is the logical outcome of the massive surge in data thanks to Amer- ica's ongoing digital revolution. Los Angeles may have about 2.6 million square feet of custom-built data center space, but much of it is already full. New projects attempting to keep pace with demand have also struggled to find suitable development locations. The Rising team is doing its part to answer the demand for high-qual- ity colocation space in the city. In 2016, we bought the West 7 Center — a 733,000-square-foot property in Downtown Los Angeles that offers both data center and office spaces. As the first purpose-built data center building in the city, we're able to meet the space requirements of businesses across a variety of verticals. Because the data center space is underground, the property also offers a secure loca- tion for data storage against crime and natural disasters. Most importantly, West 7 Center is situated near residen- tial developments and many of the city's growing IoT developers. This makes it a prime location for edge co- location and supporting Los Angeles' rapidly expanding data economy. Today's enterprises need reliable service from secure data centers in op- timal locations. At Rising, we encour- age other real estate professionals to invest in the booming market. With so many industries — including en- tertainment, banking, healthcare and office management — generating ev- er-increasing amounts of information, there is no end in sight to the demand for data center space in Los Angeles. Rising Realty Partners acquired West 7 Center, a 733,000-square-foot property in Downtown Los Angeles that offers both data center and office spaces. PROJECT MANAGEMENT CAN SAVE YOUR CLIENTS' OFFICE SPACE PROJECTS By Adam Felson, Founder and Principal, officemorph in San Francisco WORKING IN THE IOT ERA: WHY DATA CENTERS ARE VITAL TO LA'S DATA ECONOMY By Tyson Strutzenberg, COO, Rising Realty Partners in Los Angeles

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