Once Left for Dead, Suburban Office Making a Comeback - CoStar Group

Once Left for Dead, Suburban Office Making a Comeback - CoStar Group
About three-quarters of all U.S. office space is located outside the city center in low-rise and medium-rise properties in suburban business centers across the country. During the Great Recession and its aftermath, suburban office markets took an outsized hit. 

Some analysts wrote the obituary of the suburban office campus as downsizing companies shed millions of square feet, in many cases consolidating into buildings closer to public transit in urban centers. Suburban vacancy rates spiked above 20% and 30% in many markets. 

As the economy has slowly warmed up, the office market recovery has reached into suburban markets, especially ones in so-called "premier" locations where technology and energy related companies are driving demand growth. 

Overall, the suburbs have garnered more than their usual share of leasing demand over the past two years, according to an analysis by CoStar real estate economists. Since the beginning of 2012, suburban markets have accounted for a whopping 87% of office demand -- which is 13% more than their 'fair share' based on the total market size compared with CBD office markets, according to data presented at CoStar’s recent third-quarter office review and forecast. 

Top-shelf submarkets are driving the suburban office recovery, including Waltham/Watertown in Boston, Northwest Austin, Bellevue near Seattle, and Katy Freeway West in Houston, to name a few, are leading the office recovery. Such markets make up just 19% of the office inventory but drew 29% of the demand over the last six quarters, according to CoStar data. 

With all the talk about the shift in office demand to CBDs and tenants moving from suburban to downtown markets, "that's not necessarily happening in spades," noted Walter Page, director of office research for CoStar. 

Suburban office absorption tends to perform well during economic booms and recovery periods, while CBD properties tend to perform better during downturns as companies take advantage of lower rental rates to secure space closer to the urban core. 

With the recovery in the overall U.S. office market gaining momentum and rental rates increasing in the choicest CBD trophy buildings, more office users are taking a second look at the suburbs, and it's beginning to show up in net absorption. 

A diverse set of markets that include Sacramento, San Jose, Austin, Kansas City and Charlotte have posted some of the strongest net office absorption among suburban markets, paving the way for occupancy and rent growth. 

Even the long-suffering suburban submarkets of Chicago are seeing rising occupancy and the beginnings of rental increases in their highest quality buildings. 

"Tenants are starting to realize if they want Class A space in the northwest suburban market, they have to act soon to advantage of the aggressive economics that have been offered over the past several years," said Jack Reardon of NAI Hiffman in a report on the Chicago area’s suburban office markets. 

"There are few options for tenants looking for over 100,000 square feet. Over the next 12 months, demand will continue to increase, pushing rents in the highest quality buildings higher, accelerating the recovery in lower-quality buildings." 

Although the vacancy rate hovers over 20% in the East-West Corridor -- the largest of the Chicago suburban markets -- vacancy in the highest quality buildings with the best amenities was only 14%, according to BAI Hiffman’s Dan O'Neill. 

Landlords all over the country are noting a similar trend. 

"Similar to the [second quarter], we’ve had increasing momentum in suburban office leasing," said Denny Oklak, chairman and CEO of Duke Realty (NYSE: DRE). "The suburban office sector has continued to show more positive trends." 

Although national vacancies are in the mid to high teens, net absorption stayed positive for the 14th consecutive quarter and rental rates per square foot are up a few percentage points since the end of last year after nearly five years of stagnant rent, Oklak told investors. 

Amid improving fundamentals, Duke Realty signed nearly 1.4 million square feet of leases in its suburban office portfolio in the last quarter, including a 58,000-square-foot lease with Farmers Insurance in South Florida. 

Duke saw continuing strong suburban leasing activity in the Midwest, most notably in St. Louis with an 87,000-square-foot lease renewal with Aetna and a 75,000 square foot renewal with a major accounting firm in Indianapolis. 

Even developers are becoming active again in certain submarkets such as Raleigh, NC, where Duke this week announced it will build another speculative suburban office project in its Raleigh Perimeter Park development. 

Nearly two-thirds of Perimeter Three, a 245,352-square-foot, six-story building, is pre-leased to Teleflex, a medical device company. Perimeter Two in Raleigh, started earlier this year, is now 91% pre-leased and scheduled for delivery in the second quarter of 2014, according to Duke Chief Operating Officer Jim Conner

@pcionesource begins demolition of the BCA Stonecrest parking... on Twitpic

@pcionesource begins demolition of the BCA Stonecrest parking... on Twitpic

Installing Oak Wainscoting At A New Heart & Vein Medical Office

Installing Oak Wainscoting At A New Heart & Vein Medical Office

Feverish Pace of MOB Development Fueled By Strong Demand, New Occupancy Trends - CoStar Group

Feverish Pace of MOB Development Fueled By Strong Demand, New Occupancy Trends - CoStar Group


The hot medical office building (MOB) market is likely to remain in at least a semi-feverish state as the transition of common medical procedures to outpatient clinics accelerates with full implementation of the Patient Protection & Affordable Care Act, fundamentally changing the nation's health-care delivery system. 

Health care was the largest job-creation sector in 2012, with most of the jobs added in ambulatory care facilities, a trend that will continue this year according to Jeffrey Cooper, executive managing director of Savills US. 

Continued health-care employment growth, combined with the expected increase in demand for medical crae services from the aging population is expected to continue to drive development of medical ambulatory care facilities, including MOBs, surgery centers, urgent care clinics and diagnostic lab facilities. 

"That's where all the growth is going, with the Affordable Care Act kicking in over the next 12 months, including requirements for mandatory coverage," Cooper said. "Health-care systems are really gearing up to handle those patients, and much of it will be through development of non-acute care facilities. In many ways, the ACA will be very positive for health care real estate, helping create demand for outpatient facilities." 

While diminished Medicare/Medicaid reimbursements are a risk given the looming threat of federal sequestration spending cuts, most experts continue to view the market's growth prospects favorably. 

"We believe strong demographics will win out, and our expectations are for continued strong prospects in the health care sector," said real estate economist Carlos Ortea, who analyzes the medical office property market for Property and Portfolio Research (PPR), a CoStar company. 

Despite the number of new projects breaking ground in recent months, CoStar data suggests that MOB development slowed in fourth-quarter 2012 -- though it’s likely more of a pause, Ortea noted. 

MOBs accounted for 7% of total office construction in the top 54 markets tracked by PPR, down from 11.5% in fourth-quarter 2011 and below its 10-year historical average of 11.3%. Also, fourth-quarter construction of medical office rentable building area (RBA) under way as a percentage of total medical office inventory was 0.6%, down from 1% in the last three months of 2011 and lower than the 10-year average of 2.3%. 

"I would expect that this is a short-term trend," Ortea said. "The delivery of medical office space as a share of total office space has generally climbed in recent years, accounting for 17.7% of total office deliveries from 2007-12, up from its historical trend of 14.6%." 

"In the near term, I don’t think oversupply is a problem. But could very well be an issue in the medium to long term since supply has historically doubled that of national office," he said. 

Most of the increase is linked to long-term demographic trends, including population growth and the retirement of the baby boom generation. That said, Ortea believes more developers will likely move forward on projects to capture the potential increase in demand springing from the ACA health-care legislation. 

The Patient Protection & Affordable Care Act (ACA) requires hospitals to invest in and implement many costly new systems and procedures at a time when they also face lower Medicare and private insurance payments, all of which is forcing them to look for possible ways to cut costs. 

Duke Realty (NYSE: DRE), a major developer and operator of MOBs, said in its 2013 predictions this week that implementation of the ACA should continue to drive changes already under way that will affect demand for health-care real estate demand in coming years, despite the recession's lingering aftermath, lower hospital reimbursements and other issues. 

Increasingly, MOB developers are expected to design more sophisticated facilities as hospitals move higher-acuity care such as post-surgical recovery and other complex procedures off the hospital grounds, the Indianapolis-based REIT predicts. 

Also according to Duke Realty, hospitals are expected to make wider use of "freestanding emergency departments" and urgent care clinics, with operators such as Baylor Health System partnering with specialized for-profit emergency department operators to build new facilities. For-profit companies are also building standalone emergency rooms as an end unto themselves at high-traffic, retail-oriented sites. 

MOBs offering higher-acuity and/or non-acute care, for example North Fulton Hospital’s new North Fulton Medical Plaza in suburban Atlanta, cost less to build, operate and maintain than hospitals and inpatient facilities. These outpatient facilities will need to be designed to a higher, more sophisticated standard than typical MOBs, while hospital may also have an opportunity to repurpose vacated space as services move to medical office buildings. 

To date, freestanding emergency departments have been mostly owned and operated by hospitals. But mainstream providers such as Baylor Health System have recently announced they are partnering with private interests like Emerus to build dedicated emergency centers. In addition, for-profit companies are building stand-alone FEDs as an end unto themselves, at targeted high-traffic, retail-oriented sites. 

"More and more, we’re seeing for-profit [emergency department] companies competing for the typical 7/11, Walgreen’s and McDonald’s sites," noted Don Dunbar, executive vice president of Duke Realty. 

Hospitals, health systems and physician groups are increasingly willing to partner with both for third-party companies specializing in a wide range of other health care facilities, including MD Anderson, which is extending its brand across the nation by partnering with local providers on cancer treatment centers; and Community Health Network, partnering with Centerre Healthcare to build rehab hospitals. The real estate implication is that new, expanded or renovated "branded" facilities might be needed to accommodate these partnerships. 

Lastly, adaptive reuse of other types of buildings such as offices, retail, industrial spaceand even movie theaters for medical use will become a more prevalent health care and real estate strategy, according to Duke. 

"While there might be a dwindling number of vacant Circuit City, Borders and Linens ‘n’ Things stores in the suburbs, there will continue to be other suburban opportunities as chains like Best Buy and even Macy’s downsize," Duke said. In addition, health care reform will force providers to enter into other markets, especially central cities. Kaiser Permanente, Dignity Health and Scripps Health are three examples of health systems that repurpose space for medical use. 

"Many are jumping on old grocery stores," giving potential new life to former retail and office buildings, according to Duke Realty's Dunbar. 

What Makes a Cool Office?

Short answer: It's more than just a billiards table and free soda. Design buffs weigh in on how to build a creative, collaborative, and innovative workspace.

www.lincolnbarbour.com

The Portland, Oregon, office of Parliament Design has more logs than a cabin. It also features plenty of raw concrete, huge open worktables, classic midcentury-modern chairs, and the odd bear rug for rustic charm.

 

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For any company, but especially a start-up, an office is much more than just four walls, a bunch of desks, some laptops, and an instant-coffee machine.

An office is a recruitment tool, a second home, a place to hang out with friends, a place to be inspired, and, particularly for entrepreneurs with huge goals, the place that will serve as the launch pad into building the next billion-dollar company.

So it's no wonder so many founders are obsessed with office design. Jason Freedman, founder of 42Floors, is one of those founders.

"The core job of the CEO is to create the space where people can do incredible work," says Freedman. "And when you think of the CEO's job in that perspective, the office becomes a huge part of the job. And yet, it's also the thing they're least qualified to do, because most of the time they've never done it before."

The motto of 42Floors, which is based in San Francisco, is "discover and create your dream office." The start-up collects real estate data in urban areas, and businesses can search its database of available offices without the use of a broker. It's like Trulia for offices. Naturally, Freedman, who previously founded two companies and is an alumnus of Y Combinator, spends a lot time thinking about office space.

"I think that the key prompt there is: Do you care about your company culture?" he says. "If you do, then the office matters. If you're trying to build a company that's going to last a long time, the office is a key component. It's just as important as the way in which you incentivize your employees. For our employees, when we built our office, the office is their second home. It's an important part of how they see their job."

Raw spaces are in--but they're so much more than exposed beams.

It's undeniable that the "urban rustic" theme—the rough-hewn woods, the antlers on the wall, and the wide-plank floors—has seized the design Zeitgeist. Founders want a space that looks raw or unpolished, and developers are willing to pay for that look in order to attract start-up tenants.

"Now we have the strangest thing in the world happening, where developers are being forced to spend outrageous amounts of money to rip out all this expensive-material wall and ceiling, so it can go back to looking cheap," says Freedman. "The initial part of that was that start-ups took offices that no one else wanted. But they made that space into something cool."

So what is it about the raw aesthetic that's so undeniably charming? What's so enthralling about spending time in a space with exposed red brick walls? What sort of psychology is at play?

"These materials are reminiscent of a time when Americans built physical things," says Marc Kushner, the founder and CEO of Architizer, a social network for architects and interior designers. "It becomes an architectural stand-in for building actual stuff--that's really healthy. It's a rougher design. It's different than design a decade ago, which you sometimes felt was so sleek you were going to slip right off it."

He adds, "All these places are using factory windows with leaded panes, they have a tactility that reminds us of a simpler time. They're picking up on the idea that when people are walking away from their computer screens they want some relief."

In the first dot-com bust, when first-time entrepreneurs were raising tons of capital, the expression of wealth was an important design tactic, says Freedman. It signaled to the best engineers: "Look at us, we've raised the money, and now is your chance to become aligned with the Next Big Thing."

But after the first bubble burst, a general skepticism evolved in the start-up ecosystem. Now, employees want to feel they're actually building something from the ground up.

"People want to feel a part of something bigger than themselves," says Freedman. "And when you're all in it together, when Mark Zuckerberg's desk is just another desk on the floor, and everyone is there, and everyone owns it, then being in a raw space where hierarchy has been ripped out, that makes everyone feel part of something special. People shift from an employee mindset to being a team member."

Open floor plans aren't everything.

If the cartoonish, Dilbert-esque idea of gray cubicles and gray desks and gray filing cabinets sends shivers down your spine, you're not alone. Any "cool" office will eschew the Office Space doldrums of the traditional cubicle layout.

So in the last several years, the move away from cubicle structures and toward more open floor plans, where collaboration is as simple as looking across the desk to see your co-worker sitting five feet away, became incredibly popular. Perhaps almost too popular--some designers believe that an open floor plan isn't the quintessential means for having a "cool" office.

Denise Cherry, the design director at Studio O+A, which has designed offices for Facebook, AOL, Microsoft, Square, and Yelp, believes in the importance of something she calls "tertiary spaces": spaces that aren't conference rooms and that aren't personal desks, either. They're in-between areas that are quiet, where technical people can focus without being locked away in some white-walled room.

"A space that's full of collaborative space but has zero quiet space is just as unsuccessful as a space that's full of offices and has no collaborative space," she says. "It's about finding a balance, and what that balance is for each company. That ratio depends on the type of work that companies do."

Let employees carve out their own space.

By day, Alexa Baggio works in sales at a New York City-based start-up. At night, she's the founder and editor in chief of The Roger, a quarterly magazine devoted to exploring creative workspaces.

"I had this love for creative spaces, and realized there was no medium that was capturing or giving enough attention to the place we all spend the most time," she says. The Roger was launched eight months ago, and in that time, Baggio has scoured the city for creative offices. But the coolest offices, she says, are not necessarily those that have flashy accoutrements or sweeping views, but those that have spent the time to understand what their employees really want.

"As much as it's important to show off the brand in an office, people want to personalize their space," she says. "It's important to create ways for employees to make space their own without it being a detriment to the company if someone left."

At the same time, when you consider the shift to Wi-Fi and laptops, employees don't need to be tethered to one workstation.

"Wireless technology, and the size of the things we carry around, have a big impact on the build environment," says Kushner. "You don't even need a hard drive. You can virtually be anywhere. It's a huge expense to actually wire everything. Once you free up yourself from wires, you have more of a free-for-all. You don't need as many walls. Once you have no file cabinet, that frees you up a little bit. Once you don't have wires, you're actually free."

3 Themes Of Modern Workplace Design

By Katherine Butler | October 1, 2012 at 1:02 am 

Mentoring, socialization, and technology were themes heard throughout the recent IFMA Workplace Summit discussions at Cornell University. These tangible topics aren’t just taking the place of yesterday’s buzzwords like productivity, innovation, and employee experience – they’re helping companies achieve a successful workplace strategy.

The value of mentoring, socialization, and technology lie in the ability to define them within the framework and context of corporate culture, which may make them easier to harness. On a large scale, it seems that we are no longer only concerning ourselves with the “how” and “why” of the physical workspace, but rather moving into discussions about the impacts and integration of culture and organizational strategy within the workspace.

One question asked at the Summit: How do we measure the outcome of mentoring and what is the impact on space?

I would argue that it’s the single most important quality to obtaining high morale and employee investment – yet it does not need to be measured in the traditional sense.

Mentoring is essential to employee investment; without it, a company cannot attract and retain the talent it needs to find success and profitability. Having a well acclimated employee base that works together will undoubtedly help obtain the elusive “productive workspace” designation.

Equally challenged was the concept of reverse mentoring. Putting young employees in a position to support those with more experience on things they are more knowledgeable about — often coming in the form of technology proficiency — helps give them a sense of purpose and cultural importance within an organization.  This leads to a flatter, less hierarchical organization; the future of the workplace, spatially as well as organizationally.

These types of shifts within the organizational structure affect the overall space distribution. They need to be planned for so that all generations can draw on one another’s experience and knowledge.

Facility managers, clients, and real estate advisors are evolving to a more virtual world. Before being able to work virtually in a successful manner, however, it is crucial to develop a working rapport. Without the initial “get to know you period,” there is no way to graduate to a virtual relationship.

During one of the panel discussions at the IFMA Summit, it was stated that once you know an employee, you can read their body language and tone through the phone. For this reason alone, the physical space cannot be devalued as a conductor for a socialized and congruous workforce.

The effects of decreased face-to-face interaction also need to be considered within the scope of mentoring.  How to integrate new employees is often a challenge that we do not concern ourselves with in the built environment.  It is important for young employees to learn by mirroring experienced employees in day-to-day tasks, external client communications, internal company communications, and organizational behaviors.

Beyond the development of working relationships, there should be more value put on socialization itself in the workplace. Casual conversations around family, activities outside of the office, and general conversation about life beyond the office should be considered real work, as this is the establishment of a relationship and trust among co-workers. In creating space, it should be considered crucial to build space that supports this type of communication which facilitates trust and comfort working with one another.

Intranets, virtual workspaces, smart phones all allow us to work around the clock.  It has commonly been the perception that if you are not in the office you are not working. In reality, we are most likely working more now than ever given the continual connectivity.

The advancements of wireless technology are only at the beginning.  How wireless technology will continue to proliferate and revolutionize the work environment was discussed at the Summit. While we cannot predict the future, being able to support and integrate future technologies in our workspace planning will only increase the longevity of a newly constructed space as these technologies become more commonplace.

At the end of the day, the goal is to serve clients and provide a stimulating work environment that supports employees and their work processes.  The physical workspace is integral to achieving a high rate of success for a company but it cannot support users without a successful organizational culture in place.

When we are advising clients on workplace strategy, it is important to understand what the effects are on the organization as a whole. We cannot work alone in a bubble; bringing in key stakeholders, boards, HR, finance and other various groups can only strengthen the case when attempting to modify, rectify or define organizational culture.

Office Spaces that Reflect Teamwork Mentality

Office Spaces that Reflect Teamwork Mentality

You’ve probably heard (or used) buzzwords to describe today’s office worker — these “communicators” or “collaborators” might work in spaces we design called “huddle rooms” or “team areas.”

But in a world where the design trends are growing toward a consultant-based workforce, where does teamwork fit?

The consequences stemming from a lack of teamwork could be exemplified by the recent collapse of Dewey LeBoeuf. Multiple articles have chronicled the economic mistakes from the initial law firm’s merger five years ago until today.

But what ever happened to businesses running off of teamwork? As one blogger noted about the recent trend of law firm collapse’s:

“What every law firm implosion has shown us is that many partners have joined a firm in order to benefit from the brand strength, but have no interest or incentive in sharing clients or helping the firm as a whole succeed.”  – Timothy Corcoran, Why Big Law Firms Implode

What’s important here is that even some of the most powerful companies in the world with the biggest profits — as well as the most qualified and hardworking employees — need teamwork to exist. Not only does teamwork indicate communication, efficiency, and creative solutions, but in today’s workforce, it’s an unquestionable way of life.

Anat Lechtner, an NYU Stern School of Business professor and consultant herself, recently stated in an article:

“Collaboration now occurs all the time at personal desks and in hallways, or virtually via internet or smart phones, and it’s often spontaneous and informal, rather than planned in advance.” – Anat Lechner, Better Teamwork through Better Workplace Design

Workspaces are beginning to reflect this mentality. Clients are starting to understand that instead of rows of cubicles and a couple conference rooms, they need a variety of different types of spaces to enhance collaboration of all types.

There shouldn’t be any more 10-year-old posters proclaiming “teamwork” and a teamwork day where everyone gets a day off from behind his or her desk. The working force today needs to be in an environment that enhances — not discourages — teamwork.

If one can have the private workspace, the area in their office that they can talk to and/or interact with one other person, and more spaces where they can interact with larger groups. This alone allows more variety of spaces to collaborate.

For example, check out the new headquarters for the Bill and Melinda Gates’ Foundation. It has been described as having, “Chance encounters [that] yield creative energy. And mobility is essential.”

The New York Times columnist goes on to record that 89 percent of the employees “confirmed that the buildings support informal collaboration.”(Lawrence Cheek, In New Office Designs, Room to Roam and to Think)

If one of the most well-known nonprofits in the world is building its headquarters to heavily support a variety of teaming spaces, shouldn’t we all take a look at how our workspaces boost our teamwork?

Hybrid Operating Rooms: The Next Generation of Medical Design

Hybrid Operating Rooms: The Next Generation of Medical Design
By David Magner and Angela Holcomb

The medical design world is fast-paced, with new trends evolving and technologies rapidly advancing. Still yet, one innovation has stood out from the crowd lately, generating buzz from architects, hospital CEOs and caregivers alike: hybrid operating rooms. 

Hybrid OR suites serve a two-in-one function, housing both diagnostic/imaging equipment and surgical equipment in one centralized location. The highly advanced suite offers the support of cardiac, vascular, oncology, neurology and other cases by allowing caregivers to verify procedures live during an operation, without ever having to move the patient or leave the room. Fewer patient transfers result in decreased procedure times, less chance of medical errors and improved patient safety and surgery outcomes. 

As an example, one of the hybrid ORs at Nashville, Tenn.’s Saint Thomas Hospital is a 1,130-square-foot cardiac procedure room that supports the cutting-edge transcatheter aortic valve replacement cardiac procedure with the Edwards Lifesciences valve. The TAVR procedure allows patients not candidates for traditional open heart surgery to receive the life-saving heart valve replacement. Because of the precision required of the valve placement, the procedure can only be performed in a hybrid OR setting.

Studies have predicted that nearly 75 percent of cardiovascular surgeons will be working in a hybrid operating suite in the next three to five years. In fact, there’s an estimated 100 hybrid ORs already operational in the United States, according to the ECRI Institute. But designing a new hybrid OR for a hospital or medical facility is a complex task; one that involves plenty of advanced planning, strategic discussions and careful preparations.

Before an architect can put pen to paper and begin design drafts, there must be plenty of planning conversations with hospital leadership. First, the team must identify the suite’s intended function — the type of procedures it will support. The suite’s function guides all further planning, preparation and design. The next step is to identify the type of space needed to accommodate the suite and all its equipment and to determine its location within the medical facility. Is there an existing OR that could be renovated? Or will the suite require new construction? From there, the team identifies the staff that will use the suite and the medical equipment it will house. The designers also assess structural requirements, square-footage estimates and other factors, so each unique need is addressed before moving into the design and construction phases.

But the work doesn’t end there; because of the complexities of each hybrid OR and the technologies tied to the imaging component, the team tasked with construction needs to be constantly coordinating with the equipment vendor, facility and architectural/engineering team. This last push in effort makes the room achieve the initial planning goals.

The following timeline provides a rough idea of the duration of the different phases of creating a hybrid OR suite:

• 2 – 4 weeks: identify room function
• 4 – 6 weeks: equipment selection, site visits and vendor presentations
• 3 – 4 weeks: preliminary planning and site testing
• 4 – 6 weeks: schematic design (and preliminary vendor layouts)
• 4 – 6 weeks: design development
• 4 – 6 weeks: construction documents
• 4 – 6 weeks: authority’s review, contractor selection and permitting
• 4 – 8 months: construction
• 3 – 4 weeks: equipment commissioning and trials

A new hybrid OR could be up and running in about a year to a year-and-a-half. Suite sizes commonly range from 1,000-square-feet to 3,500-square-feet, with procedural rooms ranging from 650-square-feet to more than 1,100-square-feet. 

Each facility will pose unique constraints and will support unique functions and procedures, but all hybrid ORs are the same. These spaces aim to improve patient safety and satisfaction by supporting the concerted use of cutting-edge surgical and imaging equipment in one centralized location. In helping medical facilities to streamline operations and improve care, they mark the next generation of advanced operating rooms and the popularity will likely continue to rise for many years to come.

David Magner, AIA, NCARB, EDAC, LEED AP, is a project architect in Gresham, Smith and Partners’ Nashville Design Studio. Magner can be reached at david_magner@greshamsmith.com. Angela Holcomb, AIA, NCARB, is a project architect in Gresham, Smith and Partners’ Tampa office. Holcomb can be reached at angela_holcomb@greshamsmith.com. To date, GS&P has designed 11 hybrid operating rooms nationwide, with seven others in progress.


Image of hybrid operating room at Saint Thomas Hospital in Nashville, Tenn. courtesy of David Bailey Photography.

A Shocking Sight In Downtown Detroit: People - Forbes

A Shocking Sight In Downtown Detroit: People - Forbes

A Shocking Sight In Downtown Detroit: People

Merchant's Row, Detroit downtown (Photo credit: Wikipedia)

Editor’s Note: This post kicks off a new special section called “Reinventing America,” which we launched Tuesday. As part of this effort, more than a dozen Forbes contributors and staff writers will focus attention on the challenges facing towns, cities and traditional industries across the nation–and highlight the growing number of success stories we’re seeing, too. Over the coming months we’ll have stories, rankings of who’s doing it right (and wrong), and, we hope, great conversations with readers, so please join in. It kicks off with this dispatch from our Detroit Bureau Chief, Joann Muller:

The city of Detroit is on the brink of insolvency. So why is it that I’ve never been more optimistic about its future?

But all you have to do is visit Woodward Avenue, the spine of Detroit’s central business and cultural district, to see that something quite encouraging is happening. Woodward used to be Detroit’s Fifth Avenue or Broadway, a thriving retail and entertainment district anchored by the old Hudson’s Department store and the famous Fox Theatre. By the time I moved to Detroit in the late 1980s, all that was gone, and Woodward was a Ghost Town, just one more of those scary, abandoned places you didn’t go in the Motor City.A year ago, I wrote a Forbes cover story, Detroit: City of Hope, which included a conversation with many of the city’s movers and shakers about the challenges of trying to reinvent the Motor City. The headlines since then certainly have been discouraging, at least on the government side. Mayor Dave Bing has been a disappointment and he and the do-nothing City Council can’t seem to agree on anything. Meanwhile, the city’s top lawyer is dithering in court to void an agreement with the state of Michigan for a financial oversight board. The political gamesmanship is probably just delaying the inevitable, which is either the governor’s appointment of a slash-and-burn emergency financial manager to run Detroit or a municipal bankruptcy filing, or both.

But not long ago, I found myself driving up Woodward on a Tuesday afternoon, and I was shocked — shocked — to see dozens of pedestrians strolling along the street. They were soaking up the sunshine at outdoor cafes, or taking a break from work at one of the downtown office buildings to stretch their legs or run errands. In any other city, this would be unremarkable. But in Detroit, it was an amazing sight. Seriously.

Friends who work downtown marvel at the number of people they see riding bikes or walking dogs in the neighborhood. They joke that joggers are running for exercise, not out of fear.

People are moving back to the city’s core. Yes, Detroit lost about 25 percent of its population in the past decade, but young professionals are moving in, lured, in part, by cash incentives offered by some of the city’s largest employers, who have added an estimated 10,000 jobs downtown in the past 18 months.

A year ago, five companies — Quicken Loans, Blue Cross/Blue Shield of Michigan, Compuware, DTE Energy and Strategic Staffing Solutions — pledged more than $4 million to help employees offset the cost of buying, renting or renovating a home in the downtown area. The program was modeled after a similar one a couple of miles to the north, in the area known as Midtown, home to big employers like Wayne State University, the Detroit Medical Center and Henry Ford Hospital. Both programs are part of an effort by these so-called “anchor institutions” to attract 15,000 talented young people downtown by 2015. So far, nearly 500 people have taken advantage of the two programs, with many more applications under way.

The problem now is there aren’t enough apartments for all the people who want to live downtown. But that’s attracting more developers who are remodeling old buildings and creating loft apartments as fast as they can.

Restaurants and nightclubs are multiplying, too. I was at a friend’s bar over the weekend and was delighted as he rattled off all the development activity going on in his neighborhood, where the only other business currently is a strip club.

As I listened to him talk about the new steakhouse opening soon on the corner, and the buildings being rehabbed down the block, I was struck by the fact that entrepreneurs and large employers, too, aren’t waiting for Detroit to solve its fiscal crisis. They sense that Detroit’s on the cusp of a rebound and they want to get in on the ground floor, while it’s still cheap. Even Twitter is opening an office downtown.

andy Baruah, president of the Greater Detroit Chamber of Commerce, confirmed it. “The way business is looking at it, the political struggle in Detroit is not new. It’s been an issue for as long as anyone can remember,” he said. So the threat of a fiscal collapse isn’t deterring their investments.

“There is an article of faith going on here,” he said. “We know it’s not going to be pretty. But the fundamentals, the basic assets in Detroit, are strong enough that it’s worth it, especially when prices are so low. At the end of the day we know there will be a city. It will find a way.”

Jay Walljasper: Young, Talented-- and Living in Detroit

Jay Walljasper: Young, Talented-- and Living in Detroit

Declining, desperate Detroit is old news.

It's not that the city's economic woes, struggling schools, racial friction and crime have been magically solved. A glance at local headlines will tell you that.

But there are new stories to tell about Detroit today. Which doesn't mean the old stories are all wrong -- just that they're not the whole story anymore.

In recent years, for instance, Detroit has become a magnet for ambitious young people. Some grew up in the area; some move in from the coasts or other parts of the Midwest. Many are motivated by idealism or a sense of adventure, seeking to play a part in reviving a Great American City. Others, however, simply see an opportunity to fast track their careers.

You see them everywhere -- sporting events downtown, galleries in Midtown, pubs in Corktown, restaurants in Southwest, music clubs in Hamtramck, sidewalks on the East Side, soccer fields at Belle Isle park, vegetable stands at Eastern Market. But a lot of people inside Michigan and out still don't know about it.

This new story is exemplified by the Detroit Revitalization Fellows Program (DRFP), a Wayne State University project that connects rising mid-career professionals to organizations at the forefront of efforts to boost economic development in the city. Initiated by Wayne State Associate Vice President Ahmad Ezzeddine in partnership with the Kresge Foundation, the Hudson-Webber Foundation, the Ford Foundation, and the Skillman Foundation, the project drew inspiration from a fellowship program in post-Katrina New Orleans. A wide majority of the 25 New Orleans Fellows stayed in the city after the program concluded, notes DFRP Executive Director, Dr. Robin Boyle -- a nationally known planning professional who chairs Wayne State's Department of Urban Studies and Planning.

"I still marvel over the fact that we had almost 650 applicants from across the country apply for 25 positions -- the opportunity to come to Detroit," says Rachele Downs, the DRFP Program Manager and a veteran commercial real estate broker. "These are people who are graduates of some of the best schools in the country with equally impressive professional experience."

In the end, 29 applicants with backgrounds in fields spanning real estate, finance, urban planning, entrepreneurship, law, accounting, health care, civil engineering, community organizing and tourism development were selected for two-year fellowships. On top of stellar credentials, the fellows offer a unique world of experiences. Brian Connors is still co-owner of a cafe he founded in Beijing. Felicia Andrews managed economic development projects for the African Union. Beau Taylor managed economic reconstruction projects in the midst of the Iraq and Afghanistan wars. Abir Ali designs eco-friendly furniture. Marcus Clarke published a book about spirituality and hip hop music. Sarida Scott Montgomery runs a gourmet popcorn shop in downtown Detroit. Michael Forsyth worked on a GM assembly line.

The fellows -- 16 women and 13 men -- range in age from 25 to 42, with more than one-third being people of color. Seventeen fellows grew up outside the Detroit region and 12 had no previous experience living in the area, while seven of the locals were working outside Michigan when they were chosen for the program.

One of the homecomers, Allyson McLean, 28 -- who worked as a strategic planner for a D.C. consulting firm -- rejoices at no longer being part of the Detroit brain drain. "I'm frustrated with how many people have given up on Michigan," she says. "Most of the kids I went to school with are now gone. They hear gloomy stories about Detroit and don't even try to find a job around here." McLean is now working to bring new businesses and jobs to low-income neighborhoods at the Community Investment Support Fund.

Each fellow has been hired fulltime for at least two years at an organization DRFP has identified as being "actively engaged in building the Detroit of tomorrow." Off the job fellows participate in intensive sessions in leadership development and executive-level education in one of three areas: real estate development, project management or placemaking. Twice yearly they take road trips to examine urban revitalization best practices in other cities.

The employers run the gamut from the city's purchasing department to the Tech Town business incubator to Data Driven Detroit, a nonprofit offering the latest information and analysis on conditions in Detroit. Boyle notes, "Almost all these organizations have hired fellows for projects they would not necessarily be able to execute were it not for the talent the program was able to recruit."

Celeste Layne, for example, previously launched bike and pedestrian projects in the South Bronx and Harlem for New York's Department of Transportation. She is now applying her skills on the streets of Detroit with the East Jefferson Corridor Collaborative. "My vision is that we need better links to the Riverwalk, a bike lane protected from motor vehicles and a combination of good traffic flow and lively street life," Layne says.

"Celeste has made a big difference," says her boss Josh Elling, executive director of the Jefferson East Business Association. "She's had a dramatic effect on the scope of our work."

While not even a year old -- fellows first met one another and reported for work last August -- the program is already realizing one of its chief goals: fostering closer cooperation among groups working to improve Detroit's economy and civic culture.

Jean Redfield, vice-president for public programs at Next Energy, a non-profit that works with the city on sustainable energy technologies, says, "The fellows program is having a positive effect on the tendency for organizations to collaborate; their informal network results in getting things done when the traditional methods of interaction -- meetings or calling people up whom you don't really know -- are too slow or don't work at all."