This podcast episode was originally published on February 7, 2024.
This episode of In Our Expert Opinion Real Estate Podcast is joined by Brad Lunz, President of The Lunz Group, a full-service commercial architectural and interior design firm located in Central Florida. An expert in commercial development, Brad shares his thoughts on the future of commercial real estate, innovative office space trends, the challenges of a labor shortage, and the rise of hybrid work scenarios.
Brad is also the CEO of The Apiary, a Lakeland-based creative services and animation studio. Further into the episode, he provides insights into various projects, such as Catalyst, a collaborative project with LEDC, the Lakeland CRA, and the Lunz Group that involves groundbreaking digital twin technology for urban planning in the city of Lakeland.
Below is an excerpt from the interview. Listen above for the full podcast.
Brad Lunz, The Lunz Group
What’s new with office vacancy? In 2019, we were doing a very large, eight-story structure downtown. That really was one of the last pre-COVID offices. We saw a really strong decline in 2021 and 2022.
In the heyday, offices would probably make up about 20% of our portfolio. We have now gotten back to that number. We've got a lot of interior renovations so it may not be filling new businesses, but it is a retooling.
What you're seeing is a workforce that's desiring different conditions. We're all struggling as leaders to understand what “work from home” means. What are the boundaries that we're trying to set up for work-life balance? How do we create that?
We went to that open office scenario, we went to benching, and now we're seeing a return back to semi-private and private offices. There’s a sense of ownership and a sense of place.
We've also started to understand the need for physical space to collaborate. We were so reliant on Teams or Zoom and just turning off the camera, muting ourselves, but we didn't read the nonverbal language. In running a more hybrid work scenario, the collaborative component and the need for meetings are more effective. So there's a return back to the need for offices.
Are you building any new offices? A lot of it is retooling right now, but we do have some smaller commercial projects. We're not seeing spec office like we used to, but we're seeing a lot of spec industrial. Given our location, that's just something that you see.
We are also seeing a lot of adaptive reuse. Oftentimes, in central cores and downtown environments, you want to have a mixed-use building. So you have a 24-hour occupation versus just having an office.
What other trends have you seen? I've had clients where we've looked at Location Based Entertainment (LBE). What does a mall have to offer? A mall is a pretty large open space with a ton of parking. There's a convenience point to it and we're seeing LBEs going in there. At University Mall, they put in VU so they've got a virtual studio into that space.
It's really intriguing what you can do. If you keep thinking a mall is a mall is a mall, then you're not going to be able to see the opportunity and the challenge. It's just a reframing.
Brad Lunz, President of The Lunz Group in Lakeland, Florida, joins host Linda Schultz to discuss office real estate market trends on the In Our Expert Opinion Real Estate Podcast.
What is Catalyst? [Lakeland, Florida] is the only city that has a digital twin sitting in a cloud server for anyone to view.
It’s for developers. It was created by LEDC, in conjunction with the city of Lakeland, to give an idea of what something would impact because we oftentimes have a hard time visualizing it.
If you've got a project that's under construction or not started, how do you know what is going to be adjacent to it in five years? What can you do to populate projects that are going to be created so you understand the context of what you're going to design next to?
That was really the goal: to create a digital twin that could show what the future looks like based off what's on the boards. What are areas of opportunity? It really targets growth, it shows what was recently completed, and you could filter through what recently sold.
It's a first-person walkthrough. You can control where you go, you can pull up the map. It is something that really leverages that Unreal Engine in terms of how to populate it.
We found that reconstructing and building the model allowed us a better product that didn't have the Google Earth feel. Instead, we can populate it with trees that give you the leaves that rustle and it’s fun. We ended up modeling all of Dixieland coming down.
We ended up, through Catapult, merging WMB-ROI and the Lunz group. As part of that, we started to do these Catalyst plans. It was just approaching the city and developers jointly to cover at a bare minimum the cost to put together these ideas of what could occur.