Commercial Real Estate: It’s All About the Amenities

One of the hottest trends in commercial real estate is the notion of the workplace as a micro-community—a place that saves employees time and optimizes their productivity by filling so many needs that they practically never have to leave the workplace.
And the key to providing tenants with this kind of convenient, low-stress facility? Amenities.
Why are amenities important to tenants?
Employers know that time at work is stressful enough without their employees having to

worry about driving across town to pick up kids from day care, or getting to a clinic before it closes to get a flu shot. How much better to have childcare right in the building, and a nurse who comes to the office. What a relief to know that their workers are able to focus on the task at hand rather than the scheduling nightmare that awaits if they try to run errands over their lunch hour or after work.
So what kinds of amenities are we talking about?

Commercial real estate amenities today have gone far beyond sticking a weight bench and a stationery bike in an oversized closet and calling it a gym. They might include an actual fitness center, with showers and Pelotons and HIIT classes, and a full café instead of a coffee maker and vending machine. As more employers recognize the benefits of connectivity to the natural environment, green space—both inside and out—has become increasingly popular.
Notably, not all amenities need to be permanently on site. With tenant experience apps such as HqO and Bixby, employees can take advantage of a multitude of amenities that exist beyond the scope of the building: ordering food, having a prescription delivered, or even bringing in a manicurist—without ever having to leave the building.
What amenities make sense for your circumstances?
In most cases it doesn’t make financial sense to offer every amenity on the market. Flexibility and tenant awareness are crucial in determining which amenities are best for a particular building. Landlords need to determine whether their buildings are large enough (and generate rates high enough) to justify a full amenity package, and if not, what amenities are truly important to their tenants. In addition, the location of a particular property may provide easy enough access to certain amenities (a popular café one building over, for example, or a top-tier gym down the street) that it is unnecessary to provide them within the building itself.

Be aware of your competitors—who are you losing tenants to, and why?
It goes without saying that if you’re not attracting or retaining tenants like you used to, it’s important to determine where these tenants are choosing to go instead. Perhaps tenants are leaving to get closer to the subway station. Discouraging, as you can’t exactly up and move your building to that preferred location. But even this issue has possible solutions. Perhaps you can use funds you might have otherwise invested in other amenities to provide scheduled daily transportation to the subway station. Or you can offer a discount on your building’s underground parking.
Consider, too, how you can customize amenities to attract and retain tenants—one size does not necessarily fit all. Keep your tenants’ diverse needs in mind and let them know you are willing to improve the office space to better meet their particular requirements.
What can you offer that your competitors can’t?
While you may be losing out by not being close to the subway station, your building inevitably brings with it some benefit that others do not. Determine what sets your building apart, and focus on developing amenities related to that unique feature or features.
Do you have abundant on-site parking in an area where parking spots are limited? Then make the most of it, offering electric vehicle charging stations and a car wash, possibly even an oil change, so that workers have no need to leave early to get to their cars serviced before the auto shop closes.
Or perhaps your building has a rooftop patio or garden in the middle of downtown. Outdoor space is always a prized amenity, and your ability to offer sunshine and green space in a congested location is made even more valuable due to the scarcity of similar options. Make the most of it.
In closing, amenities are important to landlords because they are important to their tenants. And they’re important to tenants because they’re important to their employees. So put yourself in an employee’s shoes. What would you value if you were spending 40+ hours a week in your building? Dry cleaning service? A sport court? Talk to your tenants, and to their employees as well. A lot of them. Buy them coffee in that fancy new café you just added to your lobby. See what’s working, and what isn’t, and customize accordingly.
 
Written by: Kim Pierson
for Coeo Space
 

Taking Green to a New Level: 3 Properties that Go Beyond

Environmentally conscious real estate is no longer simply a trend, it’s a new commercial reality. With some studies reporting that buildings and construction account for as much as 39% of global CO2 emissions, businesses have become increasingly concerned about the impact of their office space on the planet. Almost every building has the potential to become more environmentally friendly, which means almost every landlord should consider ways to make that happen. There are many excellent blog posts providing reasonable, small-but-effective ways to help green your office space.

This is not one of them.

This is a no-holds-barred, tell-Santa-what-you-really-want-for-Christmas post. An extreme, what-kind-of-building-would-you-design-if-you-had-a-$30-million-grant-and-four-years-to-make-it-happen kind of a post. So prepare to pick your jaw up off the ground and read on to find out what some exceptionally forward-thinking companies and institutions are doing to make their workspaces as environmentally friendly as possible. You might be inspired to join them.

(1) The Kendeda Building—Atlanta, GA

An apiary. A blueberry orchard. Over 900 solar panels. Georgia Tech’s new Kendeda Building for Innovative Sustainable Design (scheduled to fully open this month) is attempting to be the first building of its size and function to obtain Living Building Challenge (“LBC”) 3.1 certification in the hot and humid southern U.S. To achieve this certification, the building must meet the rigorous LBC standards over a period of twelve consecutive months, creating “a positive impact on the human and natural systems that interact with [it].”

A functional part of the university, the Kendeda Building houses an auditorium, classroom spaces, makerspace, and labs. Its construction made use of local reclaimed material—much of it sourced from right on campus—selected to avoid materials and chemicals known to cause the greatest harm to people and the environment. The building is designed to collect more water and energy than it consumes: to give more than it takes.

While the LBC is particularly popular at educational institutions and environmental centers (Pittsburgh’s own Phipps Center for Sustainable Landscapes—considered “one of the greenest buildings on the planet”—counts LBC certification among its many sustainable building certifications), even companies without an overt environmental bent are becoming increasingly focused on meeting this challenge, or some aspect of it. For example, Google’s Chicago office is an LBC certified Petal renovation, as is Etsy’s Brooklyn headquarters. PNC Bank’s Davies & Andrew Branch is LBC certified Net Zero.

(2) Bullitt Center—Seattle, WA

Kendeda may be currently pursuing LBC certification, but in 2015, Seattle’s six-story Bullitt Center— designed to be the greenest commercial building on the planet—achieved it. In 2016, Bullitt’s 575 photovoltaic panels generated 30% more energy than the structure needed, making it one of the largest net-positive buildings in the world. The Center also boasts a 26-well geothermal heat exchange system, a rooftop rainwater-to-potable system, and an onsite composting toilet system. Its elevator generates electricity by braking between floors, and the facility even offers a bicycle garage—complete with repair and wash station.

Appropriately, the Bullitt Center opened on April 22, 2013: Earth Day. With an anticipated 250-year lifespan, the Center is fully leased and offers tenant-ready spaces. Every tenant within commits to energy and water budgets in accordance with the building’s net-positive-energy features.

(3) Epic Campus—Verona, WI

It’s hard to imagine a more creative work environment than software company Epic’s 25-building Madison-area campus. With meeting rooms and hallways that bring to mind Dungeons & Dragons, Indiana Jones, and Star Wars, a cafeteria inspired by King’s Cross station in London, slides, waterfalls, a tree house conference room, a four-story barn, artwork installments of all types and sizes—not to mention comfy hammock chairs—the campus is truly like no other. Epic chief administrative officer Steve Dickmann has stated that the complex was “designed to promote productivity, creativity, comfort.” Clearly environmental awareness was also at the forefront of construction.

While Epic may not be currently pursuing LBC certification, that doesn’t mean the company takes sustainability any less seriously. Among its energy sources are one of North America’s largest geothermal heating and cooling systems (thousands of miles of geothermal pipes reaching 500 feet underground), six wind turbines (located on farms about 11 miles from campus), and 6,2000 photovoltaic solar panels (spanning 18 acres). Storm water is collected and treated on-site. As Epic’s website extols, “On a bright windy day we’re practically off the grid.”

The majority of Epic’s parking is underground, which both preserves sightlines and minimizes water and waste runoff. Epic’s 11,000-seat auditorium is underground, too, for the same reasons. The auditorium is home to not only monthly staff meetings (popcorn and coffee are served), but also Verona Public High School’s annual graduation ceremony—one of many ties Epic has to the local community. Notably, the company also minimizes environmental waste by donating to the community building materials that arrive not-quite-as-specified. In 2005, it donated 300,000 bricks that were the incorrect color to help build both a school and a library in Verona.

* * *

Creating an environmentally friendly office space on the scale of a Bullitt Center or an Epic Campus may seem out of reach for the majority of us. But the fact that these types of places are being built is a good reminder of the steps we can all take right now.

Significantly, construction of the Bullitt Center utilized only off-the-shelf products—ones that were already available—to show what was possible in today’s construction. As the building’s website stresses: The era of harm reduction, half steps, and lessor evils is behind us. As a society, we need to be bold in ways that were once unimaginable.

Whether it’s moving toward new construction that’s LEED—or LBC—certified, or ensuring that any renovation includes only energy-efficient appliances and light sources, make it a priority to add sustainable features. Such features are not the stuff of science fiction. They are here today, and make long-term financial sense. Tenants want them, and the planet needs them.

Written by: Kim Pierson

for Coeo Space