BOSTON–Amenities have become a competitive differentiator in new apartment developments and now that trend is making its way to the office sector. Unlike the multifamily space, though, many landlords have not yet gotten the memo, leaving their tenants frustrated with their lack of options, according to a new report by HqO, a tenant engagement application for commercial landlords. “B2B, in general, always seems to lag trends in the B2C world and that is happening in real estate,” Chase Garbarino, CEO and co-founder of HqO, tells GlobeSt.com. “Residential groups and hotels are out in front providing different services to their tenants and now you are starting to see more office landlords moving in that direction.”
An HqO survey found that that tenants are extremely amenity driven but only 26% felt that there were enough offerings at their current office building. 35% of tenants said their office building has no amenities, 31% said their office building has some amenities but they wished there were more to choose from, and 6% did not know if their office building offers any amenities.
Of all the different types of amenities that tenants have access to, survey data show preference for fitness and wellness and food and beverage focused offerings. Tenants were given the option to choose up to three amenities and experiences most important to them:
- 62% chose fitness & wellness offerings such as onsite gyms, visiting nutritionists, spin & yoga classes
- 62% chose food deals, such as discounts to local lunch spots
- 38% chose networking opportunities, such as events at their office building with expert panels or free classes and courses for professional development
- 38% chose convenience services, such as dry cleaning, pet care or childcare
- 21% chose beer and wine experiences, such as wine tastings or happy hours in the lobby of the office building
- 15% chose beauty experiences, such as monthly mani/pedis or hair blow-drys in the office building.
“Anything that can make tenants' lives more efficient, tenants seem to desire that,” Garbarino says.
There are notable examples of office landlords offering such tenant amenities usually in trophy buildings located in gateway buildings but it is still rare to see such offerings in commodity buildings. Garbarino thinks that might change as property managers develop the necessary tools and skill sets to manage such amenities. “It's tough to expect people who've been doing a certain job — taking care of the physical building, collecting rent — to develop amenity procurement and coordination skills overnight,” he says. “But when we talk to landlords they will tell us that they know they need to move in this direction.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
