This article was written for our sponsor, JLL.
On one side of commercial real estate, you have the tenants — companies searching for the ideal space for both their employees and their brand. On the other side, you have Hillman Duncan.
Duncan and his partner, Dennis Hurley, head up the agency leasing team at JLL Raleigh, a firm that specializes in commercial real estate and property investment strategies. Together with his team, Duncan represents investors, owners and landlords looking to lease their office buildings and workspaces to tenants.
In short, Duncan’s job is all about bringing in business. To do so, he’s required to keep his fingers on the pulse of real estate, understanding what attracts tenants to one building over another, and how he can modify his clients’ buildings to do just that.
In a competitive real estate market like the Triangle, having an advantage like this is especially crucial.
“Raleigh-Durham is a high-growth market, so we see a lot of inbound industries in tech, life science, biotech, medicine — we’re a very diverse market,” Duncan said. “We’re also experiencing a lot of organic growth, where we see companies that come into the market and plant their flag, but then they significantly grow.”
For Duncan’s clients, the “ability to grow and expand” is key in attracting business with high projected organic growth, but it doesn’t simply stop at size. As the working landscape has changed, so, too, have the priorities of employees. Ten years ago, an office could be no more than a place to clock in and work for 40 hours a week. Now, the stakes are raised.
“Companies want to be in a space where their employees feel it’s enjoyable to work in,” said Gregg Sandreuter, a long-time client of JLL. “It has a healthy indoor environment with plenty of light and air, it’s new, fresh and clean, it says something about their brand and their marketing presence in their own industry.”
Sandreuter has been working with JLL for years — the company acts as his landlord representative for 400H, a construction project located in downtown Raleigh. JLL takes care of marketing the property using materials like brochures, videos and presentation boards, then gets in touch with companies and connections that they think would be a good fit to lease. Essentially, JLL acts as Sandrueter’s “person in the field, competing to win leasing business.”
To win that business, however, Hillman emphasized the necessity of strategic planning. In his mind, the future of real estate in the Triangle will revolve around a number of key areas.
First adaptive reuse — transforming old buildings into modern office spaces, like many of the renovated warehouses or historic buildings in pockets of Raleigh. Along with that, these “new” office buildings will need to be equipped with both the right amenities and the correct amount of space to compensate for organic growth and tenant demands. In other words: things to do and room to grow.
For Sandreuter, working with a company that emphasizes this type of strategic planning is exactly what he needs to stay ahead of the competition in a dynamic market like the Triangle’s.
“Commercial real estate is very much like smartphones, automobiles or other types of consumer products. There’s a bit of an arms race,” Sandreuter said. “Who can create and deliver the next round of features and benefits, whatever those might be? When Apple comes out with a new iPhone, they add a better camera that has three lenses, a bigger screen, new security features. They do all sorts of things to make their new edition better than last year’s edition. That’s what you’re trying to do, even with office buildings.”
For an employer, a building that not only serves as a working space but also has enough amenities to make their employees happy hits the proverbial two birds with one stone. Not only can it bolster overall office morale, but it can also increase retention and recruitment rates, which is precisely why so many commercial buildings are catering to these new real estate demands.
“Yesterday’s office doesn’t fit what tenants want today. So how do you reposition those older office buildings?” Duncan said. “That’s where we come in and advise the client. Through JLL’s workplace assessment program, we’re able to go in and advise what we’re hearing and seeing in the market.”
He added, “We reposition these offices by saying, ‘These are what the demands are in today’s world, and these are the amenities we’re going to have to build,’ and then we help to create that sense of place for them.”
As the world of commercial real estate has shifted to this highly amenitized environment, the Raleigh-Durham area, specifically, has positioned itself as a prime location for businesses to plant their flags.
“We have, as a region, become a growth darling in the country,” Sandreuter said. “Before, national and international banks and investors and corporate institutional investors would’ve said, ‘It’s too small a market for us to be interested.’ Now they say, ‘It’s exactly where we want to be. How do we get in?'”
This article was written for our sponsor, JLL.