November 01, 2011
Once upon a time, only a scant handful of real-estate developers, investors, and other professionals fully grasped the value that good design concepts, well executed, layered onto a project. It was axiomatic that, during prosperous periods, developers could be more magnanimous about higher-cost materials or sustainable precepts, from the outset through completion. In a bust, such luxuries would be sidelined or value-engineered to extinction. Furthermore, it was only exteriors-cladding, curtain walls, landscaping-that were seen as requiring design. Interiors would take care of themselves. Someone else would pay for them.
A few strange circumstances have conspired to alter this tableau, and the changes have meant that a far greater proportion of real-estate folks now pursue design as an integral element. While the amount of money pouring into commercial properties has soared, the length of time that an investor typically owns them before reselling has shrunk from decades to just a few years. Buildings have become trading cards. In order for their worth to grow quickly, they have to be special, not a mere commodity, and the very real role of design in engendering a perception of specialness has been thrown into sharp focus. During the boom at mid-decade, it seemed that any building could be sold at a profit. Then, at the very bottom of the recession brought on by the fall of Lehman Brothers-when the price of everything collapsed, and tenants could pick and choose where they went-it turned out that practically the only buildings with worth were those that had been well designed, outside and in. The imprimatur of stature, as projected by an exterior, was no longer sufficient. Stature had to be translated into the language of interior space. The design and construction, the finishes and fittings, had to reflect longevity, sustainability, and efficiency as well as the comfort, security, and power, not to mention individuality, that make any office or apartment building, shopping center, and hotel more than a core and a shell.
All this is not to say we are in a blissful state where the love of design-and the budgets for it-flow unencumbered. Real-estate executives will still cut wherever possible, but they will also look for ways to boost worth. Whether they understand that design contributes to the bottom line or they are simply passionate about a less tangible reward is not quite a moot point. But it's less important than the result: more livable, workable, and enjoyable spaces that are also more durable and valuable, both in themselves and as contributions to a block, neighborhood, or city. These qualities will determine which projects emerge from tough times looking less like hard-bitten survivors than something that redefines both itself and its place and time.