Post-Pandemic Office Amenities Tenants Really Want
This article by Hartman Income REIT originally appeared on Crexi: https://www.crexi.com/insights/post-pandemic-office-amenities-tenants-want
The office amenities tenants desire have changed: now, more than ever, integrated technology and health and safety are two of the highest priorities. The competition landlords face has also changed. Instead of competing only with other office buildings, landlords must now also provide amenities to outweigh the benefits of a home office. Currently, only 13% of office occupants believe that commercial real estate (CRE) owners are prepared to meet tenant needs.
As tenant expectations have evolved, landlords have a significant opportunity to implement new policies and add new building features or amenities to support tenant satisfaction.
Rethinking Office Amenities: The Future of Workplace Amenities
In a Bisnow Panel earlier in 2021, still amid the global COVID-19 pandemic, CRE experts shared a list of office amenities that tenants are now looking for when leasing office space. The amenities listed here are vital, not just for securing existing tenants but also for attracting new prospects:
Open spaces
Rooftop decks and outdoor spaces continue to rank as high priority for tenants. Openness is key. For new buildings, this may include more spacious elevators or widened hallways. This may require a de-densified design, private office allocation, or a directed traffic flow for existing buildings.
Outdoor areas
Access to the outdoors is also an identified priority for tenants, and landlords are offering more green/outside spaces to meet this need. This may require modifications to existing outdoor areas, patios, gardens, and landscape designs for existing buildings.
For new buildings, peristyles are becoming popular, which offer green areas indoors. Balconies, walking areas, and decks are other ways to give tenants access to outdoor areas.
Flexible and multi-use spaces
With more companies shifting to hybrid models, office spaces need to be flexible and adapt to new types of uses. For teams that need to gather, offering unique arrangements and spaces inside the building is key. This may take the form of flexible conference areas, enlarged social spaces, multi-use meeting rooms, and common multi-purpose areas. There could be an additional revenue opportunity for some building owners to rent multi-use spaces on a temporary or as-needed basis.
Safe and smart buildings
Smart building features support health and safety, and an integrated approach to the tenant experience streamlines operations. Touchless entry, app-based check-in or facility feature use, and even clean air technology help reassure tenants. An example is Hartman Income REIT Management’s award-winning Clean Air Initiative, which addresses the fact that clean air is a premiere, new office amenity tenants specifically seek.
Building owners must listen to what tenants want and accommodate those preferences with thoughtfully designed, well-maintained buildings.
Flexible vs. Traditional Office Spaces
The pandemic has shifted the way people work, which means that workplaces have to change. Tenants are looking for clean, technology-equipped offices with more flexible lease terms. For example, many businesses are favoring the benefits of executive suites for rent, which provide all of the amenities of a large company, in a hassle-free, cost-effective solution.
Here are some trends reported by brokers in Hartman’s network:
- Many tenants relocating to Texas markets are interested in subletting and short-term leases.
- In 2020 due to pandemic uncertainty, there was a trend toward one-year deals. In 2021, dynamics shifted back to a more typical lease term of three to five years.
- New tenants are looking for standard agreements; because construction costs have risen, tenant improvement allowances may be a way to bridge the gap.
Projecting into 2022, many CRE professionals anticipate high activity levels from office tenants, as many of those short-term deals agreed during the pandemic to come back around. Tenants are drawn to properties with an easy move-in process. Large corporate companies are following smaller businesses that have already required a return to the office. Decisions are being made faster, and tenants are seeking spaces where they don’t have to wait several months for construction.
Hartman Income REIT Management CEO and President Al Hartman described market conditions this way: “As a result of the pandemic, businesses are becoming more flexible in the way they work. Small businesses, particularly start-ups, may not need a dedicated front desk staff, a long-term lease, or a custom-designed office; they need convenience and flexibility.”
Supporting Productivity and Wellbeing With Office Amenities
The market dynamics are constantly changing, but some office amenity preferences are genuinely new. More than ever, tenants want to feel safe, secure, and comfortable at work. For many, heading back to work after a year at home requires incentives. Office amenities and designs support worker productivity and are often essential in leasing an office space. Professionally managed buildings generally offer more flexibility, giving businesses of all sizes access to executive suites, flexible spaces, and sought-after amenities.
Looking for an office space for lease? View office and executive suites for lease in Houston, Dallas, and San Antonio.
About the author:
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Anthony Trollope is the Director of Marketing at Hartman Income REIT. To stay up to date on the digital transformation in CRE, follow Anthony Trollope on Medium, on Twitter, and LinkedIn. |