With Office Embracing Hospitality, New Product Serves Deeper Needs for Occupiers

This was one of the key conclusions drawn from “Retail & Real Estate 2025: Location Analytics Insights to Drive Success,” a March 13 virtual event hosted by Commercial Observer Partner Insights and presented by Placer.ai.

The event’s participants included Christine Mastandrea, chief operating officer at Whitestone REIT; Robert Young Jr., executive managing director at Weitzman; and Ben Witten, head of real estate at Placer.ai, who moderated the discussion.

Kicking off with the topic of the vast increase in recent migration within the U.S., Mastandrea, whose company does business throughout Texas and Arizona, noted that the recent uptick has led to surprising shifts in the local population.

“The new consumer is a mixed group,” said Mastandrea. “Being in the Southern states, in particular in Arizona, you would expect that a lot of people move there for retirement. That has not been the case.”

Mastandrea said many younger people are moving to begin their careers in Texas or Arizona, and that cities in these states are also seeing a more globalized population, all of which presents a greater opportunity to commercial real estate companies within these regions.

“We see this as not only allowing us to appeal to a new consumer that is coming into a high degree of spend in their lives, but also, consumers from all over the world,” said Mastandrea. “We employ a lot of engineers in Houston, for example. In our company, we have around 28 languages spoken. That provides a lot of opportunity to reach new customers, and to reach them in different ways. People see things just being about omnichannel. In fact, this is about connecting communities.”

Witten mentioned that Placer.ai’s location analytics for the area bore this out.

“We’re seeing a lot of shifts as well in the early working-age population,” said Witten. “Post-grad folks have more options for where they can work.

Witten added Tennessee to the states that are benefiting from recent migratory trends.

“Tennessee is lining up in a big way,” he said. “You’ve got Oracle and others making moves to Nashville, and a lot of shifts in employment.”

Young — who, like Witten, is based in Texas — positioned these trends as a solid reminder of the importance of ensuring that your business assumptions and your data are forever kept up to date as the reality on the ground shifts.

“The changing net migration dynamic is just another reminder that we have to really read and react to the market,” said Young. “We need to be updating data like tenant mix or shopping patterns all the time. It’s kind of fun. It keeps us on our toes.”

Witten concurred, citing this as part of what makes retail such an exciting and spirited sector.

“Of the asset classes, retail is always at the cutting edge. It’s always evolving,” said Witten. “There’s always new concepts or service uses or clicks to bricks, as well as brands looking to expand.”

For a discussion on the changing nature of the workplace and how it’s affecting the participants’ core businesses, Mastandrea noted the change in the coming new office product, which serves a greater amalgamation of occupier needs than simply a great place to work.

“We’re seeing office get built, which seems unbelievable, but it’s a little different. It’s attached to retail,” said Mastandrea. “It’s part of a retail community, or it’s closer to where the decision-makers and the talent live.”

Mastandrea also noted that the post-COVID reorientation is seeing a lot of office product migrating away from urban centers and toward the suburbs, resulting in more new office buildings in the four- to six-story range as opposed to scraping the sky, plus extras like rooftop terraces, more natural light inside the office, and ground-floor retail.

“Much of that has to do with the need to attract talent back into the office,” said Mastandrea. “Where that benefits us in retail is that we’re seeing people work closer to home. If you want to attract talent, you really have to provide not only a great place to work, but amenities that account for an efficient use of people’s time.”

Witten replied that one of the greatest positive outcomes of these shifts over the past five years has been a more flexible approach to how people schedule their time.

“There used to be a mentality of, you’ve gotta be at your desk from 8to 6, or whatever,” said Witten. “Now, you still need to perform at a high level, but there’s more flexibility around if you need to run an errand during lunch, or pick up your kids from school. We’re definitely seeing that in the data.”

Young notes that all these changes are part of what he considers a new “hospitality mentality” overtaking the office sector.

“It’s about better concierge service, and convenient spaces people can move around in,” said Young. “I think it’s a really good sign relative to the adaptability of the office sector.”

Referencing discussion topics from his own recent panel appearance at the Las Vegas real estate conference Retcon 2025, Witten emphasized the importance of retail to the new occupier-friendly office environment.

“Retail is the glue and the stickiness. It’s what makes these spaces interesting and engaging by integrating the local flavor and local brands,” said Witten. “It’s so important to have a office building that people want to work in. The theme of placemaking is becoming more and more valuable across asset classes.”

Drilling deeper, the panel discussed fast-casual dining and grocery as retail categories that are prospering in the current environment, including the phenomenon of more cross-shopping between grocery brands, with the panel noting that consumers are far more likely now to shop multiple brands.

“The traditional grocery experience of days gone by, where you went to your Kroger, or your Vaughan’s, your Albertsons or whatever as your only grocery trip is way gone,” said Young. “But they have to be convenient, and they have to be at a price point that’s attractive.”