What Interior / Exterior Design of Commercial Real Estate Do Wealthy People Prefer?
It has long been demonstrated that quality design increases a property’s value. The more unique the design, the more valuable it is on the market.
Case in point: When Boston developers commissioned architects to create uniquely designed multifamily complexes, the results were quite unexpected. Aside from an increase in price premium, developers enjoyed reduced approval time as well as faster absorption rates.
In other words, consumers respond to design. They are willing to fork out money for properties that differentiate themselves from the rest. For developers and investors, this means higher and faster returns.
In this article, we take a look at three things – the influence of a good interior and exterior to the value of a commercial real estate, the kinds of design wealthy people prefer, and the top design trends in commercial real estate to watch out for.
How Design (Exterior and Interior) Influences a Commercial Real Estate’s Market Value
In a paper published at the Journal of European Real Estate Research, authors Ilir Nase, Jim Berry, and Alastair Adair conclude that the design specifications of a commercial real estate — which include the interior, exterior, and urban scale designs — can lead to rent premiums.
The paper enumerates the following as the key aspects of a quality design:
- building facade¬†disctinctiveness
- material quality appropriateness
These key aspects reflect the ever-evolving needs and demands of companies in¬†reponse¬†to market and economic trends. These can, therefore, change depending on what companies think is suitable for their business. But whatever it is that they choose, their preference is dependent on how a design can distinctively enhance their corporate image. They are willing to pay for a design that can communicate their brand, engage their buyers, and maximize their ROI.
The image is the courtesy of¬†2014interiordesign.com
That said, developers and investors of commercial real estate should pay attention to what their target market wants. Also, they should take note of the social, economic, physical, and governmental forces that can impact the value of their real estate.
Interior and Exterior Designs that Wealthy People Prefer
Different people have different preferences when it comes to design. Some are more inclined towards the eccentric, and others are more practical. Some business owners would choose to work on a not-so-spacious workspace, while others find comfortable in a wide working environment.
But if we take a look at the trends right now, there are specific patterns that wealthy people prefer in the design of their commercial real estate. This section explains them all.
In the past, wealthy people would buy the most expensive goods that money can buy. For instance, did you know that a Picasso painting was bought by a Russian oligarch for more than $70 million? Whether the painting was bought to showcase that oligarch’s vast fortune or to show his love of the arts, it’s clear that the wealthy will do anything to outbid the rest to get what they want.
But in recent times, there seems to be a shift in their buying preferences. While it’s true that the rich still prefer expensive items, they are now longing for a unique experience. They no longer prefer the latest model of BMW; they long for a custom-made vehicle with all the features they want. They no longer want to take a vacation at the most exquisite hotels in the world; they are waiting for their trip to outer space.
How does this affect commercial real estate?
One quick look at a business district today is enough to notice the quick rise in multi-use buildings. In a recent article published by the Atlanta INtown Paper, editor Collin Kelley states that mixed-use buildings are all the rage these days.
Developers are scurrying to build high-rise condominiums with retail on the ground floor and high-end amenities within the residents’ reach. If this is a good indication, the wealthy want to bring their luxurious hobbies closer to home. Some of the newer flats have designs that include details and amenities such as the following: exposed ceilings, European-style kitchens, dog washing station, fitness center, and bocce ball court.
Countries outside the United States are also catching up with this trend. In fact, in a report based on the recently concluded World Travel Market in London, hotel-malls are now the newest trend in the Middle East. Hoteliers partner with major shopping mall builders to provide consumers with a two-part experience.
As commodities that were once considered luxury are now getting more and more accessible to the middle class, the rich are turning to skilled designers to create one-of-a-kind goods. In China, for instance, the super rich are ditching the usual Louis Vuitton bags for custom-made leather art. In their palatial homes, they prefer diamond-encrusted water taps and other state-of-the-art facilities.
In commercial real estate, some developers are turning to world-renown fashion designers to create posh buildings. Just recently, it was announced that Century Properties, a leading property developer in the Philippines, has commissioned Italian designer Giorgio Armani and star architect Daniel Libeskind to design a high-rise building in the country. The fashion designer will help with the interior design, while Daniel Libeskind is in charge of the building.
Clearly, the rich are constantly looking for the ultimate luxury. They want not just a stunning architecture but also a luxurious interior created by the world’s best.
Aside from the aesthetics, it is also important to note that the wealthy are keen on their brand’s image. In other words, the corporate aspect must not be lost in the design, no matter how stunning it is.
When people walk into a corporate building’s premises, for instance, people should notice a distinct corporate image or at least have a sense of the company’s mission. The design should not only have a wow factor, but it should at the same time remind everyone what the company is for.
The Automotive Aftermarket Industry Association perfectly demonstrates this. The company has cleverly displayed a vintage car near its reception desk. This makes visitors and employees wonder at the creative display and at the same time be reminded of the company’s purpose.
Architects are creating eco-friendly buildings and furniture manufacturers are shifting their attention on sustainable materials. Going green is bigger than ever, and the wealthy are willing to embrace sustainable commercial properties while incorporating modern living.
Tha image is the courtesy of¬†freshome.com
In high-end resorts, the wealthy are not only pampered with end-to-end assistance, but also a lavish display of the world’s best furniture pieces. Many of these pieces may be made from reclaimed wood, but they are transformed into exquisite and delicate art forms by top artists. An example is a folding picnic table with benches designed by Chris Lehrecke.
The wealthy are also drawn to healthy living. That’s why they are willing to capitalize on technological advances to create highly efficient systems using eco-friendly building materials. According to estimates, construction costs for sustainable commercial real estate designs are higher than normal. But the rich don’t seem to mind.
Below is a list of what constitutes sustainable design:
- advanced lighting systems
- high-performance glazing systems
- building geometry and orientation
- reduced water consumption
- storm water control
- materials selection
One can easily spot this aspect by looking at the changing trends in large corporate offices.
Companies no longer favor a box-type, standardized workplace. Just because a style or design is popular does not mean they should jump into the bandwagon. Also, big offices are fast-evolving to respond to changes. For example, many companies are slowly dumping their photocopiers to favor paperless transactions. Best of all, companies favor designs that express their brand identity.
The image is the courtesy of¬†interiordesign-world.com
This shows that the wealthy prefer individualized designs that are tailored to their needs. If they don’t need large reception rooms, they can transform the space into something more profitable. Similarly, if their company is related to technology, they can introduce unique interiors that represent their business.
A perfect example of a company with individualized interiors is Sullivan, an engagement firm based in New York. Sullivan is known to be a forward-thinking brand, and to reflect this image, the company introduced whimsical yet functional design elements to their offices. They left their ceilings unfinished, took off their walls to encourage interaction, and built a reception desk made of reclaimed wood.
Top Design Trends to Watch Out for in Commercial Spaces
Trends and fads are social factors that affect a property’s market value. How these affect rent premiums, lease conditions, and sales in commercial properties is dependent on two things – their ability to increase productivity and how much value they add as far as innovation is concerned.
The image is the courtesy of¬†rothdesigngroupltd.com
In general, a good design can be a source of competitive advantage, and innovative upgrades can generate other streams of income. Therefore, property buyers are willing to pay more.
Here are the top trends identified by experts:
Sleeker and less-spacious offices
Sleeker and less spacious offices are getting more and more popular for two reasons. First, this floor plan fosters team work, interaction, and collaboration among employees. The expected end result is increased productivity. Second, it maximizes space while saving on rental costs. Advancements in technology have given way to slimmer working devices, so as a practical reaction to this change, companies now prefer less spacious offices.
Limited exposure to natural sunlight can have a negative impact on both productivity and health. These days, workspaces favor floor-to-ceiling windows. Not only do these new designs provide natural lighting, but they also give access to a panoramic view of the outside.
The image is the courtesy of¬†squarestate.net
Some of the most popular lighting designs include mood lighting and an ergonomically designed lighting that integrates direct and indirect lighting.
Open workspace environments
Data from a survey done by Jones Land LaSalle revealed that 60% of the companies surveyed maintain open offices. This kind of environment fosters overall engagement and sends the right message to the employees. Aside from that, this is also beneficial as far as finances are concerned. Open workspaces offer more flexibility, so this leads to less construction and tenant improvement costs.
In an open workspace environment, about 70% of the drywalls are taken down. Although this non-conventional workplace has met criticisms, more companies are expected to follow suit.
Eco-friendly office upgrades
Commercial real estate investors know that an LEED (Leadership in Environment and Environmental Design) certification leads to long-term profit. This certification is sometimes enough to attract renters who feel safer and healthier with LEED-certified workplaces.
The image is the courtesy of¬†inhabitat.com
A perfect example of an LEED-certified building in New York is the Rockefeller University CRC. It has achieved a Silver LEED status because of the following reasons: high-efficiency transformers, high-performance insulators, recycled construction materials, and low usage of VOC paints.
An activity-based floor plan promotes activities that promote productivity and creativity. It consists of functional rooms where employees can go to either relax, read, or take away their stress.
This idea stems from the activity based working (ABW) concept, wherein workers are given functional spaces to be more efficient. Some of the functional rooms that can be included in this non-traditional floor plan include resource centers, libraries, private enclaves, war rooms, and even a coffee bar.
Design plays a key role in the success of any business. To the wealthy, quality design can be likened to a piece of art. It doesn’t have a price, and it should never be compromised. That’s why they are willing to pay a hefty amount to create a design that has the following characteristics: unique, sustainable, tailored to their needs, and one that gives them the ultimate experience.
In commercial real estate, quality design translates to a long-term investment that leads to profit. A well-designed commercial property makes use of specific design elements that communicate the brand to the target market. A good design creates lasting impressions, but never jeopardizes the business’s bottom line. In fact, it helps sell or lease the property faster.
In line with this, commercial property owners and investors must be selective in choosing their design team. The team must have full understanding of the brand’s image and knows how to properly communicate it to increase sales and maximize profit.
Wonderful article! I love the pictures of different home designs.I like these trends and I forwarded this article to a client who I just convinced that open space and natural lighting were the way to go on her remodel. Thanks for sharing!