The War for Tenants Is Not About Amenities

NEW YORK CITY—With the prevalent trend of amenitizing offices, Jonathan Kaufman Iger, the CEO of Sage Realty, the leasing and management division of the William Kaufman Organization, says unfortunately many landlords are looking at amenities simply as a marketing tool. They are not seeing the services as a long-term value component for tenants. He emphasizes amenities are not a checkbox list of offerings.

“You have to know your tenants in order to address their needs,” Iger tells GlobeSt.com in an exclusive interview where he previewed an upcoming RealShare New York panel titled “Office Market: Seeking More Efficiency.”

Core amenities should include workspaces and conference rooms that are developed and operated to provide augmented spaces for existing and new tenants. He describes how amenities must be thoughtfully and individually tailored to tenants.

Iger visited a building with a new shared space where a boardroom seating 14 people had been recently constructed. However, the tenants’ offices already had boardrooms seating 14 people. Iger said: “You are not giving them anything new. It’s a second boardroom. Did you ask your tenants if they needed a second one/?”

He also adds, “So much of what people are looking for with amenities is to build community. We think that is completely wrong.”

He clarifies this by noting that “in certain buildings, at a certain scale, attracting a certain type of tenant, in certain geographic regions” community building works. But it cannot be the “If you build it, they will come” model. (That’s just a field of dreams.)

For example, landlords in many buildings are creating yoga rooms with classes offered a few times a week. But Iger says, “Is a partner in the law firm on the 31st floor really looking to do yoga with the proptech VC-funded company on the 19th floor? For some, sure. But for most, no.”

He contrasts the Google office model as having a community of individuals who share some like-minded commonalities. “They are already saying, ‘Let’s go to SoulCycle together. Let’s get drinks after work together. Let’s be in a book club together.’ But you never hear Google at 111 Eighth Ave. saying, ‘Hey, let’s invite the company next door into our yoga sessions.’”

Sage Realty is not trying to Google-fy their buildings. Iger distinguishes his company as offering amenities that provide the tools and resources to tenants to act as if they were Google. Instead of building a yoga room and sending out building-wide notifications to attend scheduled classes, Sage Realty provides space, technology and assistance (even including pre-screening yoga instructors) so tenants can create successful programs. His company’s new amenity is not yoga. Instead, Iger says it’s actively empowering the tenant to provide yoga—or what they choose for themselves.

The key is knowing your tenants and how they want to use their space.

“First, we believe that’s the proper way to operate a commercial office building,” says Iger. “That’s just low-hanging fruit. For any real estate owner or operator who is going to own the property long-term, the best way to maximize value is with your renewal rate.”

Vivianna Schwoerer, global head of real estate transactions at WeWork; Gregg Weisser, SVP, director of leasing at the Moinian Group; and Michael T. Cohen, president tri-state region at Colliers International, will join Iger in the panel presentation.

The 17th annual RealShare New York conference, on Tuesday, November 13, will be at the Yale Club, at 50 Vanderbilt Ave. To register click on REALSHARE New York.