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