BY JACQUELINE DUDLEY, ARCHITECTURAL PRACTICE LEADER, AUSTIN OFFICE, THE BECK GROUP, A MEMBER OF MULTIPLE AGC CHAPTERS
Many building owners and tenants are upgrading offices and building amenities to make Return-To-Office (RTO) mandates more amenable for employees wary of abandoning a COVID-era remote work lifestyle.
Employers favoring full-time in-person or hybrid work practices contend that office settings boost employee productivity and well-being, increase collaboration and mentoring and strengthen corporate culture.
According to a Resume Builder survey, 87% of companies will have RTO in 2025, while 64% said they have already implemented this policy. The survey also noted that many companies anticipate increasing in-person office days by next year.
Additionally, a recent CBRE and CoreNet Global survey found that most companies are changing their workplace design to reflect the new normal in the office environment despite budget constraints. Sixty-three percent of respondents said their companies’ design changes include “adding more amenities and activity-based spaces rather than a large amount of dedicated workstations.”
Among other new workplace experience strategies cited in the survey include companies upgrading services and amenities in existing office buildings (45%) and relocating to better buildings (40%).
Back-to-Office Mandates Spur Tenant Improvement Projects
More employees working in company offices are significantly increasing demand for tenant improvement (TI) projects. Greater demand for TI projects is also driven by reduced interest in constructing new office buildings, impacted by higher interest rates and office vacancies.
Building owners are seeking new ways to attract tenants with the downturn in the market. Building out speculative office spaces under the tenant improvement project model, provides turnkey, move-in ready solutions to clients who are looking to avoid the perceived hassle of office construction.
For tenants adding features such as wellness spaces, listening rooms (for records), gaming areas and lounge spaces create areas for employees to take a break from work and feel a sense of comfort. With an increasingly hospitality-oriented design in the workplace, TI allows the opportunity to be creative in the types of spaces that bring joy to the office environment.
For the building industry, TI allows design and construction teams to produce creative and stimulating work environments. It also helps firms recoup revenue losses incurred from the downturn in new-office construction.
Projects Benefit from Design-Build Delivery
A design-build approach offers many benefits over traditional methods used for commercial TI projects.
One of its most significant advantages over traditional building approaches is the high level of communication and collaboration that eliminates silos between teams. As a result, design-build helps avoid scheduling delays, creates cost savings, offers greater quality control and high-quality standards and minimizes potential work disputes between design and construction teams.
Tenant improvement projects are often perceived as less complex than full-building projects. In reality, they are inherently intricate, regardless of their scale, making them particularly well-suited for the design-build approach. To illustrate how design-build can produce superior results for TI office projects, here are some shining examples:
Texas Bankers Association’s Headquarters Building
The Texas Bankers Association (TBA), a statewide banking advocacy and training organization in Austin, used Beck’s design-build delivery to transform a site with an aging building into a Class A multi-tenant office building in the heart of the city’s Capitol complex district. The design featured modern office layouts and amenities like desk hoteling systems, flexible meeting spaces, and a variety of collaboration areas to create versatile spaces for their team as well as visiting members and guests.
The nine-floor office tower, completed in 2023, is an operationally efficient building that aligns with TBA’s vision and the adjacent Capitol complex aesthetic. The project includes almost 100,000 SF of space with vast western and unencumbered northern Capitol views, replacing the organization’s approximately 12,000 SF of space formerly housed within a nearly half-century-old, two-story brick building.
The project included TBA’s new 11,500-square-foot office, a landscaped rooftop terrace, a conference center and event space for all the building’s tenants. It also included ground-floor retail space, office space and above-grade parking.
Beck’s early and coordinated focus on schedule allowed the team to efficiently design, document and coordinate the tenant improvement projects within the overall construction schedule of the core and shell.
Because of the construction team’s consistency and early engagement in designing the TI scopes, the team was able to document and permit the projects more quickly. The strategy focused on TI projects as a component of the whole building and not divorced from the construction flow. Beck’s unique structure enabled the team to achieve this strategy.
For instance, early collaboration and 3D modeling enabled the integration of electrical routing within the slabs before concrete pours and the coordination of fire suppression and mechanical systems, which avoided areas with exposed concrete slab ceilings.
The conscious coordination of systems allowed the concrete to remain architecturally expressed and celebrated. It also saved money by avoiding the need to add more ceiling material, which is often used to hide uncoordinated and unsightly building systems.
Other features made possible by the design-build approach included:
- The use of concrete as structure, skin and aesthetic demanded the early involvement of trade partners to ensure quality delivery. Concrete played an integral role in the reduction of overall building costs. The in-house coordination of design and preconstruction activities, a key feature of Beck’s design-build model, enabled the team to utilize the building material to play several roles. That included delivering a structure appropriate for an owner seeking to hold (own) the building long term. This created a cost-effective skin material in lieu of more common glass, and an appropriate aesthetic that was cohesive with the surrounding architecture. The costs savings allowed the owner to design and build out building amenities such as the ninth-floor conferencing center and exterior event space.
- Replaced old office space into modern spaces to accommodate new needs of tenants, such as open and flexible workstations, in place of more traditional private offices.
- The project focused on sustainability, such as modifying the building’s mechanical system to allow private offices to control temperature and reduce energy costs by using individual cassettes as part of the building’s variable refrigerant flow system. The design included increased access to daylight, with the decision to move hard-wall offices to the interior of the floor plan. This allowed natural light to penetrate deeper into the office spaces.
Beck’s Austin Office
Another TI design-build example is Beck’s Austin office. The firm’s move and the buildout of new office space coincided with the return-to-work movement. This offered a ripe opportunity to provide a refreshed workplace environment that promotes greater collaboration, creativity and community connection.
Beck sought to infuse hospitality into the design with features such as a significantly larger café space fostering community, lounge spaces for opportunities to gather and linger and hotel desks to provide a home even for our team members who are typically on jobsites or working from home.
The firm’s design-build approach fast-tracked the work on the 8,000 SF office, completing the design and construction in about eight months.
Beck increased its efficiency and consolidation of the project schedule by collaborating with its trade partners early in a design-build format. In this instance, Beck operated in a design-build capacity and looked to their major trade partners to do the same.
Mechanical, plumbing and electrical partners were selected based on their capability of providing engineering, fabrication and installation services in-house. Although Beck had previously participated in more common design-assist formats, this project allowed the unique experience to have procured a fully integrated team.
This project deviated from the traditional method in which an engineer typically completes drawings for the space and subcontractors redraw them for fabrication and installation of the systems. The design-build approach consolidated efforts and allowed the fabrication drawings to be used as construction documents, reducing the schedule and allowing the team to move into its new home more quickly.
The office was also designed with modern layouts and amenities, including desk hoteling systems, flexible meeting spaces and biophilic design, to increase comfort, health and well-being.
Design-Build TI Projects: A Win-Win for Office Market
With the downturn in new commercial office buildings and the new return to office requirements, projects focused on tenant improvements abound. Whether small or large, the design-build delivery method is an efficient and beneficial strategy for building owners and prospective tenants to realize their goals of delivering high-quality, functional and unique workspaces.
Upcoming Updates to ConsensusDocs Design-Build Contracts: What You Need to Know
With over $300 billion in annual revenue tied to alternative project delivery, staying ahead of contracting best practices is crucial for the construction industry. Revenue from the top 100 design-build firms increased more than 26 percent from 2023, according to Engineering News Record’s (ENR’s) 2024 report on top design builder firms (see additional resources below). ENR reports even more overall revenue generated from construction management at-risk firms than design-build firms. To reflect industry advancements and maintain its position as a leader in fair and collaborative contracts, ConsensusDocs is preparing to publish comprehensive edits to its 400-series family of design-build standard contract documents. Learn more.400 Series: Design-Build
Design-build contract agreements in which one entity is responsible for both the design and construction of a project is an increasingly popular choice for Owners. ConsensusDocs design-build contracts are a popular choice. According to Victor O. Schnninerer, the largest underwriter of professional liability insurance, “the ConsensusDOCS 420 is the most used contract form between a design-build entity—almost always a construction contractor—and a design firm in a subcontracting role”. ConsensusDocs offers a comprehensive set of 51 standard contract documents in its Design-Build contract agreements subscription. Learn more.