If you ask Tomo Ohi, there’s something different these days about Panasonic’s employees in New Jersey. It’s something he’s noticed over the past nine months or so — ever since they moved into their new home in downtown Newark.
“They talk more,” said Ohi, the director of procurement, real estate and facilities for Panasonic’s North American subsidiary. “And I think they’re meeting people who they’ve never seen before.”
That’s exactly what company executives had in mind when they opted to move from their longtime headquarters in Secaucus, leaving behind the 6-foot-high cubicle walls and private offices that created a maze inside their sprawling campus.
Those have been replaced by low-profile, close-knit workstations and an airy space soaked in natural light from the floor-to-ceiling windows at the Newark office tower, which was built by SJP Properties and Matrix Development Group.
The building is replete with smaller “huddle rooms,” casual seating areas and other spaces for employees to work in small groups or break away from the crowd.
It’s not a new trend by any means. Insiders say open, collaborative and flexible offices have become popular over the past decade after being pioneered by the tech firms of Silicon Valley.
But that doesn’t mean it won’t become increasingly widespread in New Jersey, according to corporate real estate experts. With an improving economy and a tenant-friendly market, companies are becoming more willing to invest in new space — hoping to modernize their work environment and unlock long-term cost savings.
“The desire for that was there, but the capital budget to improve it wasn’t,” said Steven Lang, CEO of Somerville-based interior solutions firm DS&D. “And now that the economy is picking up. I think you’re going to see that really start to take off.”
About 70 percent of U.S. employees worked in so-called open-plan layouts at the time of a 2010 survey by the International Facility Management Association. The open-plan design calls for denser work areas with low dividing walls or no walls at all, with fewer private offices and more collaboration spaces.
The trend has had its share of critics and studies that poke holes in the model, claiming the close quarters can hinder productivity, drain employee morale and even raise the likelihood of getting sick.
But many experts point to the financial benefits of a modern workplace. Despite being more open, they say the designs require much less space per employee, allowing users to significantly cut their total square feet and fit-out costs.
And with lower interest rates, access to capital and an office market that still favors tenants, “it’s a great opportunity for corporations … to reinvent themselves,” said Robert Rudin, a vice chairman and broker in Cushman & Wakefield’s New Jersey office.
The move toward an open plan also reflects a company’s effort to stay current and attract the next generation of workforce talent, Rudin said. That’s especially critical for New Jersey-based companies, he said, because such environments “are very often the only … arrow in the quiver for the tenants” to compete against the vibrant cities.
“In New Jersey where you still are offering primarily suburban product, this kind of high-energy, open-space environment is really our answer for the moment to the more competitive urban environments that we’re surrounded by,” he said.
But modernizing one’s office doesn’t always mean latching onto a trend, said Barry Poskanzer, a Ridgewood-based architect. The open plan could make “real estate sense or economic sense (but) make no sense in terms of the operation of that division or that department within the company,” he said.
“It’s easy to say that there’s a trend, but that’s not necessarily the right way to design for your customer,” said Poskanzer, a partner with Poskanzer Skott Architects. “It comes down to the architect or the designer not falling into the trap of thinking one size fits all but rather being very careful on behalf of the client.”
He added that “rather than being an industry-by-industry decision, it should be a department-by-department decision” about how to design a corporate office. For instance, the traders at a banking firm may be best served by an open space, but that might not be the case for its bean counters.
Still, observers are noticing patterns across the corporate landscape.
“Most companies are trying to incorporate some form of this strategy of collaboration and communal spaces,” Eugene Diaz, a principal with Bloomfield-based Prism Capital Partners, said in an email, noting that health care and tech firms are at the forefront. “But professional service companies like law firms and accountants tend to continue the more traditional layouts.”