Tenant Amenities in The Modern Age

By: Jessica Bates

Decades ago, office workers expected little more than four walls and a functioning elevator when they arrived at work for the day. Now, with many employees spending long hours at the office and employers increasingly competing for talent, offices are being transformed into dynamic spaces focused on enhancing both the productivity and quality of life of those within. But workspaces aren’t the only areas being transformed; big changes are also taking place in office building common areas. For property professionals, this means re-examining what amenities are offered within a building—offerings that enhance the daily experience of occupants—to ensure they meet the needs of today’s tenants.

Whereas office workers might have been out the door right at 5:00pm fifty years ago, workers now may linger to attend a yoga class, meet at a private wine bar or read a book in a rooftop garden without ever leaving the building. Changes in tenant preferences are having a quantifiable effect on office building features and services. According to a Colliers International’s white paper, “Amenities: A Hot Commodity,” allocating only three percent of portfolio space to communal features like gyms or dining areas was once the industry standard. These days, owners should expect to commit at least 10 percent of portfolio space to these amenities in order to remain competitive.

Transwestern’s Senior Vice President of Management Services Karrie McCampbell, BOMA Fellow, CPM, who oversees a number of office buildings in the Dallas area, says that amenities are no longer simply an “extra,” they are an expectation. Buildings that miss the mark on what tenants are looking for may even prevent prospective tenants from stepping through the front door. “People are searching for office space online before they ever visit your building,” McCampbell explains. “These days, if you don’t have great amenities listed on your website, you won’t even get a showing.”

The upside of this shift is that expanding or updating amenities is a good way for older buildings to stay competitive with new development. In an area like Dallas that has a proliferation of new construction, staying abreast of trends has helped McCampbell vie for tenants. “If you want to stay in the top tier, you need to be out ahead of amenities trends,” she explains. “Even if you aren’t Class A, you need to think through what your ideal tenant base is looking for before you fall behind your competitors.”

Brian Harnetiaux, senior vice president of Asset Management for McCarthy Cook and current BOMA International chair, is working on a large campus retrofit project in Costa Mesa, California, which will be rebranded as The MET once completed. He knows firsthand how new amenities can be a great investment that helps drive success in a competitive environment—Costa Mesa is an emerging market in Orange County with considerable new construction. “Rather than tear down three perfectly good office buildings from the early 1990s, we decided to update the campus and add new amenities in order to remain competitive.” Harnetiaux explains this also made good business sense: “In Costa Mesa, new construction costs almost 70 percent more per square foot than the cost of our retrofit—and just by announcing the refresh, our occupancy level increased from 68 percent to 76 percent before we even lifted a shovel.”

Modern Essentials

Certain amenities can vary widely by market. A year-round outdoor dining space, for example, makes more sense in Southern California than in Minnesota. But the three amenities that can help an office building stay competitive are fairly straightforward: a shared meeting space, a café or deli and a fitness center. Kathy Barnes, senior vice president of Property Management with Akridge, considers these features “the basics” in her market, the Washington D.C. metropolitan area. “I don’t consider these ‘extras,’” she explains. “In a competitive market, you will lose tenants if you can’t provide these features.”

As tenants continue to rent less space per employee in an attempt to cut costs, dedicated meeting spaces within office suites are landing on the chopping block. Instead, companies are seeking out buildings that offer spaces shared among the tenants. These conference rooms offer flexibility, and eliminate the need for multiple private in-suite meeting rooms that may go largely unused. The cost for these spaces can still be passed through as a common area expense, but it’s often viewed as a building “perk.” Depending on the building, offering both a large and small conference room may help meet demand and offer occupants additional options. Some building also offer tenants the ability to rent meeting space at a nearby hotel. And while meeting spaces may be considered “basic,” they also can be quite stylish. Just like the lobby, the look of the shared conference room can create a strong first impression in a potential tenant—for better or worse.

Having an in-house deli or café that allows office workers to stay within the building to get a bite to eat is also a top priority for tenants. “People just don’t have as much time during the day to take a full lunch,” Barnes says. “It’s nice to be able to just run downstairs and grab a snack or a meal when you need it.” This doesn’t mean every building must host a restaurant. Any building can accommodate a simple, self-service deli. Properties can outsource this service to a local vendor; the deli can be stocked daily with coffee, snacks, sandwiches and salads, and customers can grab what they need and use the video-monitored self-checkout to complete their purchase. Likewise, hosting an in-house fitness center typically doesn’t require much additional work on the part of the property team. Most tenants are satisfied with a simple set of workout equipment and a shower. “As long as your fitness center is well-maintained, you don’t need the fanciest equipment,” Transwestern’s McCampbell advises. Longer days at the office can make it harder for workers to find time for the gym. Offering easy access within the building can help improve occupant wellness and morale.

A Fruitful Partnership

Changes in amenity offerings reflect a deeper shift in how the industry now approaches tenant relations. “We are partners with our tenants,” says Barnes. “We want to help them operate more efficiently, and we want their employees to feel good about coming into work.” Companies in competitive industries are often willing to pay more in rent (a relatively small percentage of their overall operating costs) to improve employee recruitment and retention. Property managers can attract and keep tenants by working with them on these goals. According to architecture firm Gensler’s 2016 U.S. Workplace study, having greater access to amenities such as gyms, specialty coffee shops and childcare facilities leads to more innovative employees. In fact, while offerings such as a fitness center or a lounge may not seem that significant, they can create happier, more engaged tenants.

With more people working remotely, offices are not just competing with other offices—they are competing with private homes. “I remember when lobby furniture was designed to discourage people from spending too much time there,” Barnes adds. “Now, we’re putting in plush couches and free WiFi, because we want it to be a gathering space.” Adding WiFi throughout the building helps companies know their employees will be able to access their work email easily, whether they’re at their desk or on the treadmill, but it also has forced building services to evolve. The internet has made most of the former duties of the building concierge obsolete now that it’s simple to order flowers or find local restaurant recommendations online. The team member staffing the front desk is more likely to double as a security guard, or serve as a visible connection to building staff, answering questions or even helping to plan tenant events.

A building may add service amenities that can’t been easily outsourced online, such as picking up dry cleaning or repairing a flat tire. The more employees see the office as a place where they can get everything they need, the happier they will be spending time there.

A bad commute to the office can negatively affect job satisfaction, but property teams can help mitigate this effect, too. Keith Major, executive vice president of Property Management with Bentall Kennedy (Canada) LP in Toronto, says that offering options for commuting has become increasingly critical, particularly in urban centers. “More people are biking or walking to work,” he says. “We’ve tripled the capacity of the showers and bike storage in our buildings over the past five years.” Offering a secure storage room for bikes, as well as a bike repair station, can make a huge difference for cyclists in the building. EV charging stations for electric cars also are becoming increasingly standard. Some property managers may even want to consider offering shuttle services from their building to a nearby public transit station.

The property team can adjust amenities offerings if one option proves particularly popular with building occupants. For fitness-oriented tenants, an expanded gym or the addition of fitness classes may set the building apart. And, with private offices becoming increasingly scarce, working mothers are likely to appreciate the addition of a lactation room—a quiet space that allows women to pump breast milk. For tenants that tend to host guests or hold frequent social events, a property team may consider adding or converting a space to make it more conducive to socializing. A small wine bar, for example, can make an office building seem more like a refuge, and provides a memorable gathering space.

Current Trends

Offices aren’t just changing to help workers get more done during the day—they are also reflecting changing tastes. The changes being made to Harnetiaux’s three-building campus echo broader changes in office trends over the past three decades since the campus was completed. More communal space is being added to the interior of the buildings, such as a tenant lounge off one of the lobbies. An interior redesign of the building includes brighter colors, more natural light and more modern finishes.

The grounds of The MET campus include an expansive courtyard, and much of the retrofit focuses on taking advantage of this outdoor space. California weather allows this area to be accessible nearly every day of the year. A running loop has been added, which also helps to encourage tenants to stay healthy and focused by taking walking breaks throughout the day. Numerous outdoor seating areas have been added for lunch breaks or outdoor meetings.

Access to the outdoors is an increasingly common request. Many buildings are converting rooftops—and even balconies—into gardens and green space. “Rooftop gardens are becoming more common,” Bentall Kennedy’s Major adds. “Some of our buildings are hosting entire vegetable gardens on the roof and giving tenants the chance to purchase produce grown on their own building.” For buildings where this isn’t feasible, even a small amount of outside seating can help tenants feel more connected to the outdoors.

Majors adds that, in addition to the need for outdoor space, more tenants are looking for healthy lunch options. “People are more into light, healthy fare for lunch than they used to be,” Major explains. “They want lots of fresh vegetables and salads.” Similarly, Harnetiaux’s The MET plans to include a community garden, as well as a farm-to-table café that will use the resulting produce. “We wanted to give people a healthy option for lunch,” Harnetiaux explains. “Beyond that, serving what we grow on the campus helps building a sense of connection between the tenants and the site.”

Of course, not everyone is content with a salad for lunch. The MET campus also will feature a “food truck runway,” an allotted space for three rotating food trucks operated in partnership with a food truck broker. This will allow tenants to have plenty of options for lunch without ever leaving the campus. To avoid long lines, Harnetiaux’s team will require each food truck to have a minimum of three workers and to be able to process credit cards quickly. There will also be access to electricity for the trucks, eliminating the need for noisy generators.

Freshening up food options with different types of food trucks can add a sense of novelty and fun to a workplace that fights against the drudgery of the daily office routine. Adding on-site games can have a similar effect. A small three-hole putting ground, a bocce ball court or outdoor chess sets can help occupants unwind or even liven up a work meeting. These options can also build a sense of community among those who work on the property, making them far more likely to stay over the long term.

Sprucing Up Your Amenities

For property teams that want to improve their amenities offerings, connecting to current tenants is a good first step. Before Harnetiaux’s team began the process of retrofitting, they interviewed every current occupant to ask what they wanted the campus to become. “There was a clear pattern in what everyone told us,” he recalls. “People wanted better meeting rooms, brighter lobbies and more food options.” This feedback was thoughtfully incorporated into the final plans.

Not every request could be met; for example, some tenants lamented the loss of a large outdoor fountain that the McCarthy Cook team deemed a poor fit for California’s drought conditions. However, the loss of the fountain was offset by the installation of lush new drought-resistant landscaping.

It’s also important not to make assumptions about what tenants want. Bentall Kennedy’s Major recommends taking time to fully assess the property and what it is capable of accommodating. “You really need to center the process on what you have to work with within the building,” he suggests. “Not every building lends itself to a rooftop garden, for example.” He adds that this process is also dependent on location; owners need to take into account local weather, tenants’ commuting patterns and what is already available nearby. Bentall Kennedy also surveys tenants on a regular basis—generally every two years—to get a sense for what can be improved or added.

Even small projects should be given serious weight. “Do not go halfway,” Major warns. “You can just put some tables and chairs into an empty room and call it a conference facility.” Harnetiaux agrees that if an owner or manager wants to upgrade their amenities, they have to take the time to do it right. “I’ve seen buildings that install a bocce court and rebrand their property as ‘live-work-play’ without changing anything else,” he says. “But today’s tenants are savvy, and doing this poorly can be worse than not doing it at all.” It’s also important to ensure building basics are not being neglected—the lobby, elevators and bathrooms, for example—before amenities are added. Finally, good communication is key whenever construction is necessary to add an amenity—making sure that current tenants are aware of the timeline and any disruptions goes a long way to keeping tenants happy until the final product is unveiled.

Property teams may also want to think about how sustainability—another big industry trend—will factor in to amenity decisions. Akridge’s Barnes points out, “It’s not just what amenities we have, it’s how they’re built and how we maintain them.” Adding a wellness component through a fitness center or a rooftop garden will be enhanced through the use of green cleaning or a focus on energy efficiency.

Taking time to broadcast what’s available in the building can also emphasize the property’s value. Flyers or newsletters can help remind tenants of what’s available in the building, and hosting tenant events that capitalize on meeting rooms or roof gardens can also reinforce these benefits. Transwestern’s McCampbell says her teams also offer services that go along with the amenities they offer. “We have on-site amenities, but we also have what we call the ‘Transwestern Experience,’” she says. “We’ll offer daily food deliveries or set up a quarterly farmer’s market to augment what we already have.”

Cutting-edge properties are already offering a glimpse of what future trends may hold. Some urban properties offer special drop-off areas for those who commute using ride share services, and these may eventually expand to include driverless car drop-off. Pet-friendly office spaces are becoming increasingly common on the U.S. West Coast, and this trend is slowly migrating out to other cities. Industrial properties, which typically do not offer traditional amenities, are beginning to introduce features such as bike storage and food options, to those who work on site.

Whatever new trends the future holds for the office sector, property professionals who stay in touch with changing tenant demands will always maintain a competitive edge over those who fail to listen to what tenants are saying.

This article was originally published in the November/December 2016 issue of BOMA Magazine.