How Exceptional Design Boosts Real Estate Value: Insights for Investors
How Exceptional Design Boosts Real Estate Value: Insights for Investors
Exploring the Vital Role of Design in Elevating Property Development
In today’s Newsletter, we explore the value of investing in exceptional design for real estate development.
Before diving in, a glimpse into my journey underscores why I consider design crucial in development.
As a fully qualified architect, my background is in design. Before moving into Real Estate Development, I spent the early part of my career as a newly qualified architect working for a top global architecture practice: SOM (Skidmore Owings and Merrill).
When I started my ‘second career’ within Real Estate development, I was extremely fortunate to be able to join a Global Real Estate player (Brookfield) who had realised how important design quality was to the status of its own Commercial Real Estate brand. I don’t know of many major institutional funds that employ senior people with a background in architecture to work across all of their development projects.
The Brookfield experience illuminated the exceptional outcomes achievable by integrating design and development throughout the real estate cycle.
Here are a few key highlights of what I contributed to achieve:
2.5M Sq. Ft. of delivered Commercial Real Estate Assets.
c.£500M of added GDV.
Over 1M Sq. Ft. of pre-let space to major global companies (Amazon, Schroders, RBC, Freshfields).
New Planning Consent for a ground-up 37-storey office tower adjacent to Leadenhall Market.
With these results came the formation of very close relationships with the broader consultant teams and architects who worked with us to make these projects a reality.
None of this was shouted about, but I could see first-hand the value that this process added to the final product.
Now, let’s dive in.
The Creative Essence of Real Estate Development
Developing Real Estate is a very creative process at every stage of the cycle and even before design gets into the picture. It requires a powerful vision to be able to imagine a product where most people just see a patch of dirt.
Numbers need to rule whether there is a potential deal or not, but numbers can not alone dictate the quality of the outcome. To deliver on that quality is key that the Developer has a deep understanding of how the final product (The Building) is put together.
I like to see the role of design in Real Estate drawing parallels from its role in sectors such as Product and Industrial Design. In those sectors the quality of the product is key in order to achieve success and the big global players such as PepsiCo and 3M employ Chief Design Officers. They have brought the role of the Designer in the C Suite.
Beyond Aesthetics: Reimagining Design in Real Estate
Many Real Estate Operators fully delegate the design of the final product to the consultant team and provide them with a minimal and generic brief. They then sit back and wait to be presented with options to pick from. Unfortunately, this often leads to disappointing outputs.
Unfortunately many confuse design as being mainly a process to help with choosing the right aesthetic solution. This couldn’t be further from the truth. In Commercial Real Estate a good aesthetic is often a byproduct of a well-thought-out solution in design terms.
Design: The Economic Solution to Complex Real Estate Challenges
Buildings should serve people, not the other way around.John Portman
Rather than viewing design as an add-on piece to the development process or as a means to get planning consent, it should be viewed as a more integral part of the development journey.
The designers need to be managed throughout the process to guide them towards producing the outcome that is the most aligned with the Development Business Plan and the Brief.
So my advice is to try and stay closer to the design process and if you lack the time or expertise add to your team someone that can.
I promise it will pay massive dividends in the long run.
In Summary: Integrating Design for Enhanced Real Estate Outcomes
Treating design as an integral part of the Development process can pay good dividends to the outcome of a project:
Gain in-depth product knowledge.
Recognise design's role beyond aesthetics.
Actively guide the design team.
Consider adding a skilled Design Manager to your team.
That's all for today.
See you next week.
Is there anything else that you would like to add to the list?
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