Next Generation Perks That Tenants Want

In both the office and industrial sectors of the commercial real estate industry, the nature, scope, and necessity of up-to-date amenities will be a driving force in lease discussions, according to a panel at NAIOP’s CRE.Converge commercial real estate conference, which took place this week in Seattle. 

The panel was moderated by Dawn Riegel, principal, Ware Malcomb, and included panelists Michael Longo, senior vice president, CBRE; Stacey Mosley, director of research, Brandywine Realty Trust; and Jinger Tapia, vice president, design, Ware Malcomb.

The panel presented a ranking of the amenities that are gaining momentum. In order of popularity:

• Hybrid work
• Work-life balance
• Wellness initiatives
• Culture/pride in place
• Shared desks
• Location-agnostic hiring
• Live, work, play communities
• Sustainability
• Smart buildings

In the office sector, certainly the race is on to create a workplace that employees want to make the effort to get to, given the ease and ability to work from home. 

Those features may be as simple as a welcoming environment with sophisticated coffee drinks. But it’s more than that. 

Mosely said that “from a campus perspective, one of the things that we’ve always leaned into is having civic commons. We have always taken that approach and are now taking a closer look at what those next steps mean for outdoor space. Post-pandemic, people appreciate going outside.”

That means that parks and open spaces outside the office facilities need to be considered a part of the overall design. 

With some employees coming into the office a few days per week, they should be considered as visitors to the area, so that offices will be located near a full supply of restaurants and shops, the panel said. 

Social activities are also a key component with surveys showing that employees are interested in participating in community based, “giving back” activities.

Cost is always a factor, and landlords must determine which specific amenities can be provided for tenants that also can be used by the next tenant. That consideration could lead to a model that is similar to co-working: multiple tenants could share conference rooms and relevant technologies. 

On the industrial side, several factors are driving an amenity upgrade as well, including employee wellness initiatives, and the increasingly prominent role that cities and municipalities play in the design and aesthetic of new facilities. 

For employees, a plot of grass with a picnic table for smokers is not going to cut it anymore. Even with the red-hot industrial market, employees have leverage in seeking areas to take a break from work, relax and be mindful. Or, to take advantage of a lunchtime break on a volleyball court. 

The dearth of land for industrial and the declining demand for many office properties, particularly older, Class B space, would seem to be a winning formula for industrial development. 

However, as many of the older offices are located in urban or even residential areas, public officials are wary of the design.

“There’s an aesthetic demand,” said Tapia.  “The most important or human aspect is really at the entryway. We’ll add more glass, closet space, employee areas. It needs to look like an office building.” 

She said new projects will also have increased landscaping, added parks, and community benefits to combat the not-in-my-backyard attitude that some people have toward industrial real estate.  

The technology front is still evolving, the panelists said, with some companies using heat maps to assess where and how buildings are being used. Others are experimenting with mobile apps, which have their uses and perhaps over-uses. Do employees really need an app to order a cup of coffee?

“I think we still have a ways to go on that front,” Mosley said.  The ones that are most important are related to audiovisual.

Regarding technologies, and all amenities, she said, “you really want to make sure that’s a seamless experience.”

If employees are going to come to work, either in industrial or office properties, the one certainty is that landlords and employers will have to provide both what they need and what they want – maybe not volleyball or shuffleboard, but game changers, nonetheless.

Kathryn Hamilton is Vice President for Marketing and Communications for NAIOP.