Whether it’s the demise of the open office floor plan or a resurgence in remote work, the jury remains out on what a post-COVID-19 office will entail. For certain, we can expect that a heightened emphasis on health and wellbeing will bring new tenant perspectives to workplace use and design. Commercial real estate professionals must be prepared to accommodate these changing demands, partnering with clients on build-out and renovation projects geared to promote occupant wellness at the highest degree.
At a time when the relationship between environmental health and public health has perhaps never been more apparent, the office sector has an opportunity to improve the current build-out and renovation process through more sustainable practices. And, this approach isn’t just better for the environment—it can also benefit your (and your tenants’) bottom line.
GETTING TENANT BUY-IN
When a tenant moves into a commercial space, that space is usually fully customized to their needs—including the design, layout and finishes. How the tenant decides the space should ultimately look and function depends on a wide variety of factors, and sustainability isn’t necessarily always one of them.
"While the decision to go for a sustainable build-out is ultimately a tenant’s, property professionals are well-positioned to advise their clients throughout the process to ensure they make choices in the best interest of their companies," says John K. Scott, BOMA Fellow, RPA, senior executive managing director with Colliers International. According to Scott, it just so happens that sustainable options—which can include benefits like long-term financial rewards, aesthetic appeal, a strong workplace culture and branding opportunities—are often those that will bring a tenant the most value. In such cases, getting tenant buy-in is just a matter of communicating that value in a way that resonates with the client.
"It’s all about educating your tenant and knowing their business objectives," says Don Erb, BOMA Fellow, FMA, RPA, senior sustainability associate for the University at Buffalo. "For instance, if the client’s objective is to keep their staff productive and efficient, you can talk to them about the impact environmental elements like natural light and air quality have on employee performance," he explains.
Many clients are simply unaware that sustainable options exist or that these options come with benefits. "There’s a value proposition to be made for almost every factor within a build-out," says Josh Richards, CEM, LEED AP O+M, director of Sustainability for Transwestern; which means property professionals must be as exhaustive as possible when sharing these options with tenants. "Present as many pathways as possible to creating sustainable space, eliminating waste and reusing objects and materials all up front," he explains. This will increase the likelihood a tenant considers one or more sustainable alternatives during their build-out and it also will help them narrow down which options fit their budget.
According to Richards, part of crafting these value propositions is reminding tenants that the cost of a sustainable build-out, which he estimates can run 5 to 10 percent higher than the standard build-out price, will pay off in the long term. "Clients don’t always initially see their rented space as an investment," he points out. "They’ll often discover down the road that the provider and landlord only cover so much: Utility costs, for example, fall back on the tenant itself." Plus, a sustainable build-out offers branding opportunities that can be quite fruitful: "I’ve seen clients take raw materials from the construction phase and turn it into a beautiful table or art piece, which allows the company to share their sustainability journey with visitors."