Better Together: Realizing the Vision of Collaborative Hotel and Shared Office Space
Better Together: Realizing the Vision of Collaborative Hotel and Shared Office Space
- Oct 29, 2019
Courtesy: T Dupree Scovell | News Source: urbanland.uli.org
Hotels and office buildings are taking on many of each other’s characteristics in terms of design and use. This confluence has several drivers, among them the evolution of technology, shifts in guest and tenant expectations, and the increasing mobility of the American workforce.
More and more professionals are traveling or freelancing, using hotel rooms, lobbies, cafés, and restaurants as their third place for working and meeting. Even the most traditional users of office space—such as attorneys and accountants—are emerging from cubes and closed-door spaces to find nontraditional ways of working. Add “bleisure” travel into the mix, where business and leisure time are blended into one trip, and it is logical that the traditional approach to hotels and offices must evolve and has been.
When describing partnerships, a wise man (and the author’s father)—John Scovell, who started Woodbine Development Corporation some 45 years ago—once said that you should always look for those relationships where one plus one equals more than two. With Woodbine’s most recent project in L.A., finding the ways that hotel and office spaces can benefit each other seems to be in line with his formula.
In recent years, hotels have been adding both informal and formal coworking spaces to their setups, cultivating communal spaces where visitors can take care of business, be social, or both. In Chicago, Virgin Hotels has taken a business approach to coworking, creating the Virgin Commons Club, offering monthly memberships that provide access to amenities such as free drinks, a library, a bar, private meeting areas, wi-fi, and wireless printing. Ace Hotels in New York City has taken a more a leisurely approach, creating inspiring lobbies and gathering spaces where interesting people want to be. Rather than seeking revenue from membership fees, Ace focuses on the multifaceted benefits of having people in the hotel: interesting people activate the lobby of the hotel, ultimately building brand awareness and driving incremental food-and-beverage revenue. Regardless of the approach taken, office-inspired is becoming an increasing popular feature inside hotels—and one that can be profitable.
Office spaces and building owners have been getting increasingly creative—and more research is being done in this space to inform that creativity (e.g., Gensler’s recent workplace survey). Propelled largely by the global expansion of WeWork, office space has begun to take on an entirely new personality. WeWork and other coworking companies like Spaces and CBRE’s Hana are essentially building hotel lobbies flanked by small offices that spur opportunity for collaboration and innovation. Such atmospheres were once considered to be the stuff of startups that were lacking street cred or the actual credit needed to secure a long-term lease. Now, all types of companies—including the likes of Microsoft, Salesforce, Adidas, and others—are seeking enterprise solutions with their office environments, which include diverse layouts as well as an infusion of hospitality-inspired amenities and services. JLL cites that coworking/flexible space has become the primary driver in the growth market, growing at an annual rate of 23 percent since 2010. It also predicts that flexible workspace and amenity space, which currently makes up 5 percent of the market, will reach 30 percent by 2030.
Woodbine Development Corporation and Lincoln Property Company have been tracking these trends for years and looking for the right place to implement it—Woodbine for hotel and Lincoln for office space. A match made in Dallas, the companies joined forces through their L.A. teams and started looking for the right property that would allow them to realize their vision for a twist on what was trending: the creation of a collaborative hotel and office space.
That vision is now becoming a reality in L.A.’s Westside. The project is located in a highly visible area situated within L.A.’s two strongest innovation hubs, including the highly sought-after submarkets of Culver City and Playa Vista. Woodbine purchased the Doubletree L.A.-Westside in 2018 for $151.5 million, which came with a 2.2-acre (0.9 ha) parking lot entitled for a new, class A office development, which it turned around and sold to Lincoln. Together, the two companies—along with Goldman Sachs and Gensler—are creating the first collaborative hotel and office arrangement of its kind in the City of Angels.
The Doubletree L.A.-Westside first caught Woodbine’s eye in 2011. The property had been recently converted from a Radisson to a Doubletree. Even though the name on the building changed, the property remained an unremarkable airport hotel on the border of Culver City, home of Sony Studios, and Playa Vista, which was then a mixed-use, master-planned community still working to realize its potential.
At the same time, Lincoln was quickly becoming the most active commercial developer in Playa Vista, delivering nearly 2 million square feet (185,800 sq m) of office and mixed-use development. The office buildings were being leased to high-quality media and technology companies, including Fox Studios, Samsung, and the Honest Company, to name a few. In addition, Lincoln developed a new West Coast entertainment headquarters for IMAX and had launched several other projects in Culver City in 2017, among them the new Apple Media Headquarters at 8777 Washington, which coincided with the rapid absorption of new and renovated office and production studios headlined by Amazon, HBO, and others. Meanwhile, Woodbine was renovating the Hilton Pasadena and, in 2017, launched Woodbine Legacy Investments, a real estate fund through which it acquired Hilton Dallas/Park Cities and W Atlanta-Buckhead.
Given their portfolio combined experience, the Woodbine and Lincoln teams viewed the Doubletree and the 2.2-acre (0.9 ha) parking lot entitled for office development as a diamond in an evolving rough. The hotel was also less than two miles (3.2 km) from Los Angeles International Airport, with its annual passenger count of nearly 100 million—not to mention the hotel’s proximity to the new L.A. Stadium, which will be home to both the L.A. Rams and San Diego Chargers. With its Culver City address, the potential office would offer residents, visitors, and office users like Google, Facebook, Sony, and YouTube an ideal environment with proximity to Marina Del Rey, Venice Beach, Santa Monica, and El Segundo, all markets experiencing increasing amounts of office compression.
The economy across the L.A. market had started to diversify with an influx of tech and media companies—spurring growth, transformation, and reconfiguration across the metro area, making the easily accessible Culver City and coastal Playa Vista markets more and more of a draw. Rob Kane, executive vice president for LPC West, the Western division of Dallas-based Lincoln Property Co. and Woodbine’s partner on the deal, adds that the hotel’s location off the 405 freeway places the project directly in the center of these two submarkets, which are two of the most dynamic submarkets in Los Angeles. Occupancy is full in both cities, making the Doubletree project well timed.
In 2016, Woodbine and Lincoln were able to navigate a very competitive bidding process and get control of the Doubletree and adjacent parcel. But due diligence findings around entitlements ultimately took the deal off the table. Fortunately, Woodbine remained on good terms with the seller and was able to get a second bite at the apple, thanks in large part to Patrick Deming and Andrew Holt of Eastdil Secured, who were serving as the seller’s advisers. In March 2018, Woodbine was prepared to move quickly with a longstanding lending relationship in tow. It purchased the hotel and adjacent parcel, Entrada, a few months later for $151.5 million through Woodbine Legacy Investments. Shortly thereafter, it sold the 2.2-acre (0.9 ha) parcel to Lincoln in a codevelopment venture. Woodbine is a partner on the office project, as is Goldman Sachs. Gensler serves as the architect/design firm for the office building and HBA is the interior design firm for the hotel.
Both Doubletree and Entrada stand to benefit from each other’s presence—with the sum being greater than the parts to give the two properties a competitive advantage in the marketplace.
Underway now, Woodbine’s $35 million investment in the Doubletree will transform public spaces, the exterior facade, and landscaping, and 25,000 square feet (2,300 sq m) of meeting space to reflect the needs of today’s travelers and the surrounding modern, fast-growing, tech-forward neighborhood. All 375 guest rooms and guest baths will also be updated and outfitted with new furnishings, surfaces, lighting, and decor. Amenities such as the fitness center, pool, Share Bistro, Share Wine Lounge, and more will also be upgraded. Woodbine will also integrate a dedicated coworking space into the hotel, which will be available to guests, Entrada tenants, and nearby residents.
With access to all the amenities of the Doubletree (likely automated and accessible via an integrated app in conjunction with support from the hotel team), the Entrada has been designed to feature expansive views, dynamic indoor/outdoor environments including a large, landscaped amenity deck, floor-to-ceiling glass with flexible floorplates, a spacious lobby and a generous parking supply, and unmatched opportunities for tenant signage and identity off the 405 Freeway. The office will break ground in the third quarter of this year. The hotel’s adjacency to the office project has allowed for the design of a more efficient building with a higher ratio of rentable square footage. This also leaves room for the integration of the aforementioned features, such as accessibility to the great outdoors, which is appealing in Southern California and especially so among the types of tenants flocking the area. Every office floor will have two open-air decks built into the interior of the structure, allowing people to work outside while also enjoying being outdoors. Entrada will also have retail amenities on the ground floor to benefit tenants and hotel guests as well as locals in the community.
When finished in 2020, Doubletree and Entrada will stand out for passersby on the 405, and they will also be a standout for those on the ground looking for a place to work, stay, or play. There is nothing else like this setup in the West L.A. market, Kane says, which is exactly why Woodbine and Lincoln are taking it there.
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