Tenants upgrading nowadays are trying to impress their clients with conference rooms that have the latest audio visual equipment, like touch screens, and for their brands to be everywhere in the office, according to Daniel Walker, vice president of development for the Irvine office of brokerage JLL.
“They want the stuff that adds sizzle,” he said. “We’re seeing big open offices with a strong pitch room for clients. They want people to have an experience when they come into their space.”
Individual offices are out of style when it comes to workspaces. Tenants are seeking wide-open spaces that provide flexibility and collaboration among employees. Tenants want to please their employees with perks, like gyms, and the proximity to restaurants for staff members’ convenience, said Walker, whose firm monitors prices in Orange County.
A tenant in OC is paying an average out-of-pocket cost of $163.46 per square foot to upgrade its facility, about 25% higher than in Los Angeles and 22% lower than in Silicon Valley, according to JLL. The OC landlord chips in an additional $50 per square foot, higher than the national average of $43.61, JLL said.
Tenant improvement prices have increased because of the shortage of labor and compliance with California’s energy efficiency standards, also known as Title 24.
“There is so much work out there” for contractors, Walker said. “It is a seller’s market.”
