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October 22, 2009

Architects step up to help developers

  • Designers are increasingly handling development aspects, such as real estate planning and brand strategy.
    • By STAN LAEGREID and YVES MIZRAHI
    Callison

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    Laegreid
    mug
    Mizrahi

    To some degree, the resounding impact of the global recession can be felt in nearly every industry in the world. It also has forced an unprecedented shift in the architecture and design industry and most firms are doing what they can to adapt to this new dynamic.

    With these deep and ongoing changes affecting clients, and consequently, commercial development, many companies are stretching new muscles to maintain strength in an ever-changing landscape. Part of the “new normal” means architecture firms are evolving to become consultants and advisors on development aspects ranging from design to real estate planning to brand strategy.

    The architect is increasingly teaming up with the development community to provide a depth of insight not previously employed by the industry.

    In response to the economy — and client demand — some U.S.-based firms are expanding and ramping up a stronger overseas presence, particularly in China and the Middle East where there is significant growth, momentum and opportunity. China is still considered an emerging market and new building is still very much the order of the day.

    By comparison, our domestic market is not only mature but also saturated in virtually every sector. The result is that for every development, a premium is placed on being closely targeted to your customer and differentiating your destination from the over-developed competition.

    You cannot be “all things to all people” anymore. Market saturation does not only apply to the amount of stock in the marketplace but also very directly to consumption of most immediately developable building sites. This places a burden on the developer to take some challenging sites that will likely require multiple uses to justify the development. Historically our development business has been industry-driven with multiple integrated uses being an exception.

    Locally, the focus is on the changes in the commercial real estate market. With expertise in design, repositioning, portfolio management, branding, real estate and more, architecture firms can offer a full breadth of services to new and existing clients. With years of experience in “what to do” and “what NOT to do,” the expertise a design firm brings is invaluable.

    Maximum impact

    Now, more than ever, companies are looking to spend money in ways that will deliver maximum impact within tight budget and time parameters. The goal is to make what already exists sustain the future and survive continuing economic ups and downs.

    As the development community adjusts to these new dynamics, the architect has emerged as a partner in conceiving, conceptualizing and testing a much broader agenda, often beyond the immediate experience of the developer. Having been through this process with increasing intensity, the architect is now in the forefront of what has been tried (and tried) before. It is a whole new set of rules.

    This kind of advisory role has been part of Callison’s repertoire and recently come to fruition with the opening of The Bravern in Bellevue. By any measure the opening went beyond expectations and was received with great fanfare despite the down economy.

    In 2003, when the project was in its infancy and known as Meydenbauer Center, Callison worked with Schnitzer West to create studies and coordinate market analysis that helped to hone a focused and targeted market. This concept was further delineated to define not only a primary market but also secondary and tertiary audiences that would complement the crafted experience and offerings.

    This process resulted in a clear vision and focus for an environment and experience that told a story of a mix of tenants, restaurants, office workers and residential position that gave the consumer an immediate association when making their buying decision. This is what retail stores think of as brand awareness and a connection to “who are the customers and what do they want.”

    Advice from within

    Another consulting opportunity for architecture firms lies with internal groups of business and real estate planning.

    Callison’s arm, Callison Real Estate Strategies, offers advice on the development of overall real estate strategic initiatives involving new market expansions, store portfolio optimization, site selection, market demand analysis, proforma/economic analysis and financial analysis of merchandise categories. Input such as this provides critical feedback to the architects in developing efficient and cost-efficient store formats and prototypes for both new and existing stores.

    This new role for the knowledgeable architect provides opportunity to explore, offer and test real-estate strategies in tandem with the developer. Site studies balance an optimization of ever-increasing demands on the multiple uses, financial concerns of phasing to regulatory complexities and administrative approvals.

    Whether it’s repositioning a portfolio or existing property, or strategizing on new spaces and destinations, developers can turn to architecture firms for guidance on what changes would be the most beneficial for the current climate and the long-run, and most important, changes that are consistently economically viable.

    Stan Laegreid is a principal at Callison. Yves Mizrahi is president of Callison Real Estate Strategies.


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