One of the world’s biggest architecture firms says there is a sense of “optimism and engagement” heading into 2025, driven by cooling inflation, future rate cuts and a growing appetite for developers to start investing again.
On Thursday, the US company Gensler unveiled its “Design Forecast”, which names the trends expected to define design in the coming year. These trends include an emphasis on how design must adapt to changes in urban life – the ongoing shift to working from home, the impact of downtowns and shopping districts, and increasingly unaffordable housing.
“Our cities are convention centers,” Jordan Goldstein, co-CEO of Gensler, said in an interview Fortune in mid-November. “That’s where we see the power of design to really enhance that experience.”
The COVID pandemic caused changes in urban life that can still be seen. Despite the company’s appeals to return to the office five days a week hybrid work seems to have settled into urban professional life, reducing the need for office space and in turn reducing foot traffic through urban centers. This, along with higher interest rates, contributed to a massive global recession in the commercial real estate marketas office and retail tenants reduce their physical presence.
“The challenges we’ve faced since the pandemic are driving a lot of (these design trends),” Goldstein said. Then add what he calls “crisis multipliers”—like technological change and sustainable development, to name a few.
But he notes that planners are now much more willing to consider the possibility of experimental redevelopment in the city center. “There’s an opportunity to have these dialogues (with planners) that, frankly, weren’t necessarily happening on a regular basis before the pandemic,” he said. And in some markets, such as India, these discussions “didn’t happen, period.”
In one example, Gensler is working with Philadelphia city government to turn things around South Broad Street into a 10-block-long arts park with green spaces, outdoor entertainment and public artwork. The firm is implementing a similar project in Chicago Michigan Aveconstruction of new green spaces, performance spaces and a new cafe in the water tower of Jane Byrne Park.
“Most of our cities know they can’t just thrive in the future doing things the way they’ve been doing them. “Bringing design into the mix really fosters innovation (and) experimentation,” Gensler co-CEO Elizabeth Brink said in mid-November.
Unique and unpredictable
In its “Design Forecast,” Gensler identifies five trends it calls “the most important and actionable ideas our clients need to know,” drawn from dozens of offices around the world.
“We go to all our locations and ask: What do you see? What do you see a need for in your region?” Brink said in mid-November.
Several trends relate to the need to reimagine the city after COVID, as neighborhoods move away from the more traditional mix of separate office districts, suburbs, and shopping and entertainment districts that characterize most modern cities.
For example, Gensler predicts that mixed-use districts will take “center stage in 2025” as cities seek to “foster community inclusion and bring people together around shared experiences.”
Both Brink and Goldstein referenced the idea of the “20-minute city,” or an urban environment where people can access home, work, and entertainment within just a 20-minute commute.
But beyond that, Brink suggested there is a desire to create “a more immersive, participatory experience,” citing sports as an example. “People want a unique and unpredictable experience. They do it together and it creates a sense of community,” she explained.
How to fix the office
Another major design trend that Gensler highlights is the need to redesign the workplace. Instead of telling people to return to the office, employers will need to make it a valuable place to work. The firm predicts that offices will be all about “employee experience” and “inspiration” as tenants continue the “run for quality” that matches the “professional aspirations” of their employees.
“We know the workplace is still very important,” Brink said in mid-November. “It’s really important for organizations. This is very important for creativity. It’s really important for connection, it’s really important for the human experience,” she explained.
A Gensler Global Workplace Survey released in May reports that nearly all employees in high-performing offices have access to a space to focus, compared to only 26% in low-performing workplaces.
Some companies have successfully reinstated in-person visits after moving to a better office. British bank HSBC doubled the bet in which the New York employees walked into the office after moving to the Spiral, designed by Danish architect Bjarke Ingels.
However, the fall in commercial real estate caused by hybrid work will not go away. Gensler predicts that low prices are giving developers the opportunity to create “new value real estate.” Lower interest rates may also encourage developers to take the plunge and convert their unused office space into something more desirable. The architecture firm says the “adaptive reuse boom” will go beyond simple office-to-apartment conversion as developers instead embrace “creative conversions” involving sectors such as healthcare, science labs and seniors housing, among other sectors .
But Brink noted that the transition from office to home is easier said than done. Offices cannot afford the traditional layout of apartments due to the need to complete plumbing and kitchen areas.
She suggests a co-living model with smaller units and shared bathrooms and kitchens will be more convenient for developers. Construction costs can be reduced by a third, three times as many units obtained in the conversion.
“It’s a creative way to look at some of these conversations that can be great for different urban populations: students, retirees, good for anyone who might need a space,” she suggested.
Converting underutilized office buildings to apartment complexes could help another of Gensler’s 2025 design trends: the drive for “affordable market housing,” as changes in zoning laws and building codes encourage all types of homes.
One plus one equals three
Founded in 1965 by architect Art Gensler, Gensler employs more than 6,000 designers in 17 countries, in the Americas, Europe, Asia and the Middle East. Among Gensler’s many projects are Headquarters Santa Clara, California with Nvidia, terminal one, which is still under construction at New York’s JFK International Airport and Shanghai Towerthe third tallest building in the world. The firm reported $1.84 billion in revenue for the 2023 fiscal year.
Brink and Goldstein took over as co-CEOs of Gensler in April. Their predecessors, Diane Hoskins and Andy Cohen, ran the architecture firm together for nearly 20 years.
Courtesy of Gensler
Gensler is an unusual example of a firm that has adopted the co-CEO model. Other companies tried to have two managers with varying success: Salesforce and SAP both saw one of their two CEOs resign within the year. (On Monday, the chip manufacturer Intel adopted a co-CEO model, elevating David Zinsner and Michelle Johnston Holthouse to the roles temporary co-executive directorsreplacing CEO Pat Gelsinger, who is retiring.)
However, successful CEOs say that structure allows executives to rely on each other for support, provides a check on a particular executive’s biases, or simply allows the executive to get more done each day. “Most CEOs have 24 hours in a day, we have 48 hours in a day,” Hoskins said. Fortune‘s Leadership Next podcast last year.
“The two of us can work together and be a one plus one equals three scenario,” Goldstein said. “We each have certain passions and we bring them together and it really resonates throughout the company.”
