Navigating the Current Landscape of
Commercial Office Space
R&R Thought Talk with Adam Kaduce
As President of R&R Real Estate Advisors, could you give us an overview of the current state of the commercial office market?
The enduring effect of the COVID-19 pandemic, particularly remote work, has resulted in increased vacancy rates in the commercial office market. Companies are now rethinking their office space usage, leading to a significant shift in how commercial real estate is utilized. Additionally, there's a noticeable trend towards quality, with companies seeking elevated service levels and amenities to enrich the workplace experience. Despite the vacancy challenges, I believe we're on the path to recovery as we continue to adjust office spaces to meet evolving needs.
Could you highlight one of the most notable success stories or projects in your career at R&R Realty Group?
One of the most exciting projects I've been involved in is the development and lease-up of the Westfield Building! At R&R Realty Group, the Rupprecht family has always been forward-thinking in delivering next-generation office space. Initially conceived as two brick buildings, the Westfield Building evolved into a modern campus with two glass towers and a central atrium for amenities. When we introduced this project to the market, it was unlike anything seen in the Des Moines market before. Despite some initial headwinds in selling a product under construction with unique amenities and a new price point, the response from the office market was overwhelmingly positive. Upon completion in 2019, the Westfield Campus was over 90% leased, a testament to R&R Realty Group's vision and dedication to pioneering the future of office spaces.
What trends are you observing in the commercial offices, and how do they impact the market?
We're seeing a continued demand for high-quality commercial offices as businesses reassess their workspace needs. Some are downsizing while others require more space to accommodate changing work styles. At R&R, we prioritize providing exceptional service so our clients can focus on their core business. There's also a growing demand for top-notch office amenities. We're upgrading two former single-tenant office campuses, the Arcadia and Crescent Building, to include features like large training rooms, modern executive boardrooms, and Starbucks kiosks for elevated coffee experiences. Our goal is to create vibrant, collaborative spaces that make coming to work enjoyable. We're also integrating outdoor elements into our projects, such as transforming four acres of outdoor parking at the Arcadia Building into green spaces with amenities like pickleball courts and Wi-Fi-enabled collaborative workspaces. These enhancements have been well received by our clients, enhancing their overall work experience.
What inspires decisions to redevelop buildings, like R&R’s Arcadia and Crescent Buildings?
We prioritize listening to our customers, understanding their needs and preferences for their office spaces. We also think it’s our role to look into best practices and trends that are happening across the country. Our goal is to set the standard in the Des Moines market by innovating and introducing new ideas, rather than simply following the crowd. We’ve done just that in a variety of ways, such as bringing a rooftop patio, inspired by trends in Washington DC, to our Westfield Building. We’re also constructing an immersive video wall, like one done by Sales Force HQ in San Francisco, to our Arcadia Building. Those were both amenities that, through our research and relationships in the industry, we saw taking off and in-demand. We’re proud to be leaders in introducing them to Des Moines, setting a new standard of workplace excellence in the area.
How do you see redeveloped office buildings reflecting the changing needs and expectations of tenants?
As employees redefine how their work weeks are set up, we’re noticing a range of preference from our customers. Some still prefer the traditional schedule with fixed offices and dedicated in-person presence, while other users are embracing hybrid schedules. For our customers adopting hybrid schedules, office days are centered around collaboration and meetings, while at-home days are focused on individual work. With these changing needs, we are repositioning our workspaces. Offices are evolving to resemble airport lounges, offering drop-in areas, shared workstations, and increased collaboration zones. We’re also diversifying seating options, incorporating couches and soft seating to create welcoming and inviting environments. It’s a shift from “me” space to “we” spaces.
What role does the reimagined Crescent Building play in the revitalization of the local area, and what benefits will it bring to businesses and the Urbandale community?
The Crescent Building stands out as a premier office destination near the Urban Loop in Urbandale. With access to the interstate system and local amenities, I really believe that the Crescent Building is going to continue to enhance the community, attract large employers to the area, and provide a great spot for employees to come to work. This is a great opportunity for area businesses to be located in a high-quality location, while also being a place that their team members look forward to coming each day.
What do you envision for the future of office space, and who do these recent redevelopments fit into that vision?
At R&R, we're always looking ahead, anticipating the needs of tomorrow's workforce. Today, accessibility to amenities is key for office-goers. Whether it's a quick walk to grab coffee or lunch or a short drive to local spots, convenience matters. Lunch outings with coworkers are common in hybrid work models, so having nearby dining options or even food truck parks is essential. Sustainable office environments are also a top priority for us. We're early adopters of eco-friendly practices, from using less harsh cleaning chemicals to upgrading HVAC systems for better indoor air quality. Increasing green spaces around office buildings not only connects people with nature but also reduces our carbon footprint. Partnering with renewable energy providers like MidAmerican Energy underscores our commitment to sustainability in central Iowa. Placemaking and sustainable design remain central to our vision for office spaces of the future.
How can businesses and investors take advantage of the opportunities presented by redeveloped properties like the Arcadia and Crescent Building?
Des Moines is fortunate to have high-quality office owners with long-term development strategies. While nationally there may be a trend towards repositioning office assets, such as conversions to multifamily or smaller, multi-tenant spaces, Des Moines is more focused on meeting the specific needs of businesses. By listening to our clients and prospects, we tailor solutions to fit their needs, whether it's customizing spaces or providing unique amenities like outdoor gardens. Our goal is to adapt our high-quality buildings to meet the evolving needs of our customers, ensuring we're always meeting them where they are.
What’s one of your favorite office design trends you’ve seen recently, and why?
One of my favorite design trends I’ve seen is just the versatility of office spaces. Gone are the days of large, open workstations. People desire soft seating options and the autonomy to choose where they work within the space. We work closely with our customers to design physical spaces that meet those needs. While confidential conference rooms are still essential, we also provide workstations that offer storage and personalization opportunities for employees. Our team at R&R still has dedicated office spaces, and it’s fun to see coworkers bring in family photos or artwork to make the space their own. It is so rewarding to help customers transform their spaces into exactly what they need.
What are some of the key factors that make R&R Real Estate Advisors stand out in the brokerage industry, and how do these factors benefit your clients?
As a subsidiary of R&R Realty Group, we're uniquely positioned to cater to our clients' needs with the largest portfolio of spaces in Iowa and Nebraska. With 450+ of our customers transforming our spaces to meet their needs, we’ve got a great list of examples to share with prospective clients. We’ve got an exceptional team to work with, our interior designers and construction division ensure that projects meet both design and budget expectations. Beyond design and construction, our property management team is another add-on that allows us to take care of our clients for the long term. This family of companies, the full-service approach, is what really sets R&R Realty Group apart and allows us to support our customers from start to finish.
