Hospitality-inspired Amenities Are Essential to Attracting Tenants and Competing in Today’s Commercial Real-estate Marketplace

Armed and Ready

Inside, offering grab-and-go or sit-down food options, bars and other unique social spaces that can be utilized throughout the day help create a sense of uniqueness that will help draw tenants and visitors to the property.
Inside, offering grab-and-go or sit-down food options, bars and other unique social spaces that can be utilized throughout the day help create a sense of uniqueness that will help draw tenants and visitors to the property.

Fairbrother characterizes the commercial rental market as “an amenities arms race,” and given the types of services being offered today, it’s clear amenities are a form of ammunition in the war to attract and retain tenants. As such, facility executives should be looking to devote resources to several areas increasingly sought after by prospective tenants, including food and beverage offerings, fitness centers, business centers, social spaces and lounges (indoors and out) and access to retail.

Sloan notes the amenities that tend to draw the most attention are food- and outdoor-related. Rooftop decks, in particular, are desired even in markets where they can’t be utilized year-round. “Rooftop areas have become an incredible driver because, even though tenants may not use them all the time, the ability of having selective client events and access to high-end views is something that’s really been important to prospective tenants,” he says. Even more attractive is if the rooftop area is adjacent to a bar or hospitality space that can host weddings or other social events.

Likewise, he says outdoor green space at the ground floor of the building that connects to the streetscape can be instrumental in drawing people in. “Outdoor spaces—not just the roof decks but the entry plazas, as well—where you’re really creating a front yard is another part of the process that can be really transformational in terms of the building.”

Inside, creating cafés, bars and other unique social spaces that act as “mixing chambers” with the goal of extending people’s stay throughout the day is increasingly important. “It’s really creating a uniqueness about the property that establishes it as a different place people will really gravitate toward and connect with that has life at different parts of the day, be it morning, mid-day, afternoon or drinks later on,” Sloan says. He adds offering a variety of grab-and-go food options and “fast-casual” choices with personality (in other words, not chain-based) to complement the speed of business are also essential.

The fitness component is especially relevant given the current wellness trend happening in interiors (see retrofit ’s story in “Trend Alert”, March-April 2017 issue). “There’s a wellness factor everybody’s grappling with right now,” Sloan says, adding buildings can support people’s desire for health by including not only fitness centers with showers and locker rooms, but also space for yoga, Pilates and stretching, for example. “We’re seeing everything from meditation to quiet rooms that have emerged as people are trying to manage the stress side of the world,” he explains.

Likewise, Fairbrother observes among the more popular amenities people are looking for is simply a space for positive distraction. Whether it’s a coffee shop or other social space where they can engage, these other “third places” can help employees shift their concentration and think more clearly. “If you think about what Amazon just built in Seattle, for example, there are two office buildings that just finished, and they put this beautiful, elegant soap bubble architecture out in between the two of them and that’s really meant to be an alternate thought environment; someplace where you’re working on something big and you’re stuck,” he explains. “Go there, and maybe it will free your mind.”

Battling the Budget

Rooftop decks are desired even in markets where they can’t be utilized year-round. The ability to have selective client events and access to high-end views is something that’s important.
Rooftop decks are desired even in markets where they can’t be utilized year-round. The ability to have selective client events and access to high-end views is something that’s important.

Any discussion about amenities must be preceded by a baseline assessment of a building’s existing condition and performance. In other words, the cost conversation must begin with the question: How much will it take to bring the existing facility up to building and energy codes?

“That’s one of the first things we ask,” Fairbrother says. Assessing the basic infrastructure, like the column grid; the capacity of the mechanical, electrical and HVAC systems; and the condition of the elevators, for example, must come first. “Those boxes have to be checked before you even get into the discussion of what amenities you will put in place,” he adds.

Sloan agrees and says there are a handful of factors building owners need to consider before thinking about amenity upgrades—and infrastructure is critical, especially with the high-tech demands of most companies today. “There’s so much demand, particularly in getting a building to be tech-savvy and tech-responsive and making sure the internal pathways and hardwiring will support the new generation of spaces coming in,” he says.

Similarly, with the focus on energy efficiency today, a building’s performance also needs to be evaluated and improved, if necessary, before investing in amenities. “There’s so much energy consciousness in terms of how buildings need to perform, which has a great deal to do with the mechanical and electrical systems,” Sloan observes. Upgrading to more efficient glazing is a significant first cost but something most tenants expect to achieve lower utility bills and better light levels, for example.

Assuming the building is up to date, adding amenities often comes at a significant price, which is why many building owners are offsetting them by splitting costs with neighboring properties. “One of the things I’m seeing a lot more of and people starting to embrace is this whole idea of either a mixed-use stack or adjacent mixed use where it’s shared amenities,” Fairbrother says. If an office tower and residential building are next to each other, why build a fitness center in both? Rather, he suggests creating an enclosed connection between the two and sharing the amenity.

Additionally, Sloan says when traditional lobbies that essentially function as circulation paths that eat up usable square footage are transformed, there are savings to be realized as they move from “wasted space” to “active space.” Although difficult to measure in terms of direct ROI, he says these newly activated spaces increase circulation and the impression of the building as a destination, which can impact the bottom line in the long run with improved occupancy rates.

Sloan also points out calculating ROI is an ongoing exercise, but “there is an opportunity with tenants coming in that there is a willingness to command higher rents if there is a really robust amenity package.” But rather than simply reducing the process to the bottom dollar, he suggests looking at facilities not merely as a commodity but as an attraction and retention tool. Once the building is up to code and the amenities are in place, “then, obviously, you can fill up the building and manage that accordingly, and then the ROI plays itself out pretty quickly,” he concludes.

PHOTOS: MICHAEL ROBINSON

About the Author

Robert Nieminen
Robert Nieminen is a freelance writer; the former editor of Interiors & Sources magazine; and retrofit’s editor at large, specializing in interiors. Under his direction, Interiors & Sources was the recipient of several publishing awards, as well as a pioneer of sustainability reporting.

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