By Jack Stubbs
With demand and activity in the market in the Puget Sound region showing little sign of slowing, many companies are adjusting their strategies accordingly at the turn of the year.
We recently spoke with Yuri Petroff, executive managing partner with Interior Office Solutions’ Pacific Northwest division, about his perspectives on the industry in the year ahead and how the interior design industry is playing a role in Seattle’s commercial real estate market.
Interior Office Solutions, a company founded in 2000 and headquartered in Irvine, California, is a “Best in Class” Haworth dealership with showrooms in Los Angeles, Orange County, Portland and Seattle. The company is a a top 4 Haworth dealer globally in terms of volume, and the fastest growing Haworth dealer globally. The company’s strategies center around creating beautiful and highly functional work environments for its clients.
What can you tell me about IOS (the company’s strategies, where it operates, etc.)? Who are some of your main clients, and what are some of the services that you provide the industry?
When we work with our clients and our partners in the architectural and design communities, we focus on designing spaces that will help companies define and strengthen their brand and culture, attract and retain the best talent and foster a higher level of employee engagement, health and wellness. We do this under the ever-important framework of delivering our projects on time and on budget.
Our service offering is broad. We want to be considered a turn-key, “one stop shop” for our clients. We offer space planning and interior design services, furniture procurement, project management, warehousing/asset-management, delivery, installation, architectural products (modular wall systems and raised flooring systems) and custom furniture manufacturing. We feel that this broad service offering, coupled with our large West Coast footprint, truly differentiates us from our competitors and adds significant value to our clients.
Looking back on 2017, how did the year ultimately shape up based on your expectations for it?
2017 was our second year in business in the Seattle market, and we are very pleased about our results and our progress thus far. We have built a fantastic team, we have a strong and loyal client base and are very excited about what lies ahead. Obviously, we are in a period of unprecedented growth in Seattle, and we feel that we are very well positioned for continued success, and that we can provide a unique and exceptional experience to our clients.
What factors do you think will drive demand for commercial furniture in 2018 and beyond, and how is interior design influencing the broader market? How are some of the traditional tenants responding to the ways that space is being transformed by tech clients (i.e. thoughtful, practical design, maximizing floor plans, etc.)?
The obvious answer to this question is that the demand for commercial office furnishings and interior design services is always driven by the health of the economy as a whole. Investment in growth and an expanding workforce will always drive the demand for the products and services in the commercial real estate sector.
Because of the demand and the very high rents in the cities that have a high concentration of technology based companies, traditional tenants are being forced to follow some of the same trends in workspace design such as smaller workstations or less dedicated square footage per person, more shared space such as collaborative areas and small private meeting rooms, micro kitchens/cafes and touchdown workstations.
Workspace design is also being influenced by the need to attract and retain the best talent in any given market. Because talent is in such high demand, again in the hotter, tech heavy markets, organizations of all types are trying to create work environments with a lot of wow factor, with many of the perks and amenities people used to only find at home. If people love where they work, they will be more apt to stay at the same company and stay at the office longer. Think Google, Amazon, Microsoft—we are seeing similar design trends being followed by traditional tenants.
As a zero landfill manufacturer, Haworth is one of the industry leaders in sustainability efforts. What do these efforts mean in the manufacturing and design industries more generally? Have you seen regulations or awareness around sustainable design and product ingredients evolve over the last couple of years?
The efforts of Haworth and other major manufacturers to design and manufacture responsibly are a reflection of their values and the much higher public awareness around the impacts of manufacturing on our environment. The leadership at Haworth and the clients we serve have set the bar very high and are simply demanding that the products are manufactured responsibly and that we build in ways that have the least possible impact on our environment.
I haven’t seen any major regulations change, other than the Title 24 in California and other similar regional legislation that centers on the electrical efficiency of commercial buildings.
What are some of the trends that you’ve been seeing in terms of what clients are looking for in the design industry? What do these trends reveal about the market more generally?
Clients are more in tune with how important good design is in terms of so many facets of their success. In addition to function, workspace design has a major impact on things such as culture, brand, efficiency, health and well-being of the employees, attraction and retention, and again, our natural environment. Clients are looking for us to weave all of this into how we approach their projects, and I believe are seeing not only the benefits, but also the return on investment that follows good design.
Another trend I believe we are seeing is a product of the increase in demand and the very high rents in the hotter commercial real estate markets. With this comes the pressure owners feel to make decisions quickly and to execute on plans quickly. Simply stated, clients are demanding more in a faster time-frame. To be successful in this hyperdrive environment, service providers in our industry must be prepared to react quickly, have tools at their disposal to aid in the decision making process, have proven processes of project management and project delivery, and, most importantly, have a deep team of talented and experienced professionals.
What are some of the figures and metrics that you track, personally, that give you a sense of what’s happening in the industry?
We look at broader trends in the economy, and more specific trends such as commercial real estate vacancy rates, data from the architectural and design sector, and BIFMA data and forecasts. We have experienced tremendous growth over the past 3 years, and so far are not seeing any indicators that things are slowing down…knock on wood!
Beyond furniture, what are some of the other services and tools being created for clients relating to workplace strategy and environment? How will interior design and workplace experience impact company culture in 2018 and beyond?
I think that technology will continue to be a major driver in how we work and subsequently, the design of the workspace. Tools such as Haworth’s BlueScape, which enable users to collaborate, share and save information in real time across a network, will have a big impact on design and how real estate is utilized.
I also believe that we will see a continued trend to humanize the workplace, make it healthier, and feel more comfortable, like home. With all the changes, services such as workplace strategy, change management, and design centered on health and wellness in the workplace will be in high demand.
Is there anything that concerns you about the year ahead?
What concerns me most at this point is the sustainability of the economic growth we are seeing. I am concerned about what the current leadership in Washington is doing to shape the future of our country, both economically, socially, and in many other ways beyond that.