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Culture Clash: Effectively Managing Buildings with Polar-Opposite Tenants

By Blake Peterson, Director, Asset Services, San Francisco

Conflict.

Building operators face the constant challenge in a multi-tenant environment of meeting the needs and expectations of different users. Through the evolution of Class A space and tenant mix, assumptions about how and when tenants use buildings have changed drastically. As building operators, we strive to provide each tenant with the unique experience they expect, though it is not always easy.

Let me paint a slightly stereotypical and certainly exaggerated picture for you:

A multi-tenant building has a healthy roster of traditional tenants that pride themselves on stark and stoic institutionalism.  The tenants moved into a Class A, trophy building as a visual representation of the message they want to send to their clients: We mean business. You can trust us. 

Out of nowhere, a mobile application-based dispatch company leases space in the same trophy building. Immediately, the lobby fills with crowds of young, tech-savvy entrepreneurs—sipping their coffee with their tennis shoes propped on the designer imported leather lobby furniture.  In the multi-tenant corridors, lines form outside of the washrooms as the new tenants change clothes after their 10am employer-provided Pilate’s class. Dogs and bikes are now crammed in the elevators. Dogs are riding bikes while handing out bagels. (Okay, maybe not that last one.)  Needless to say, building management’s phones are ringing off the hook with aggravated tenants. What these irritated neighbors do not know is, the guy in the elevator with the skateboard is actually the founder of said tech tenant. He is paying the highest rent, and (gasp!) has the best credit in the building. End scene. *Bows*

Property managers are responsible for providing optimal solutions for everyone at all times while staying within lease obligations and best serving the interests of the owner.

The first step in managing a potential culture clash is pursuing a thorough understanding of tenants’ different uses, cultures, expectations and lease obligations. Consider how each tenant will compliment, conflict or influence the building’s current vibe. What helps us understand how to better serve the collective needs of a tenant mix is an open mind and honest discussions about general standards for dress codes, work hours and security access needs. After identifying such differences, it is the property manager’s role to decide where the potential conflicts may exist and how tenants can successfully co-exist under the same roof.  In some circumstances, allowing tenants to operate in perfect isolation is a simple solution. However, in most situations, a common ground–at least in the common areas–must be identified, and expectations must be managed on both sides.

The following are some strategies and solutions for addressing polar-opposite tenants:

  • High Density Tenants: Tenants with more employees have a higher demand for building resources such as toilet paper, plug load and cleaning services than tenants with fewer employees in the same amount of space. Despite this, expenses are typically allocated based on square footage percentage. Converting buildings with standard Base Year leases to Industrial Gross leases will allow tenants to pay directly for high-demand services that they use in excess of typical users, such as janitorial and utilities. Gross-ups just got grosser, but it results in a more equitable allocation of operating expenses across the tenant base.
  • Restroom Capacity: Technology tenants, on average, have more male employees than female. In most jurisdictions you cannot add another male restroom without adding another women’s restroom. To solve this problem, building unisex restrooms or converting all restrooms on a floor to unisex can be a solution. Also, unisex restrooms have been a successful strategy to accommodate transgender tenant employees.
  • Security Needs: Many creative tenants are highly conscious of preserving intellectual property and need systems in place to control access to their space. Adopting technology that allows tenants to enter and approve their own visitor lists for processing clearance with the building security protocols will minimize backups of visitor registration in the lobby.
  • Pets in the Office: If your building allows dogs inside, develop a code of conduct for pets that is distributed to all tenants. Dedicating an elevator for pet transport will help regulate where owners take their pets outside of tenant space. Establishing a cleaning fee per doggie accident will better maintain common areas and encourage tenants to clean up.
  • Dedicated Elevators: For tenants that wish to remain isolated from the rest of tenant mix, provide them with a dedicated elevator. This is easy to manage with destination dispatch technology.
  • Bike Parking: Some tenants will bring their bike into their office space for the purpose of secure parking. Dedicate elevators for bike transport and identify the path of travel through the lobby, or repurpose a parking stall into a private bike cage.

Every tenant is different. By taking the time to truly understand every tenant’s needs and maintaining the perspective of serving the best interest of the client, property managers can identify simple, creative solutions to manage a culture clash.

As property management experts, embracing challenges and finding practical solutions to challenges is our core competency. A new, fascinating wave of commercial office users is here. With careful observation and lots of practice, we may be able to identify the difference between a “millennial” and a “tech-bro”…although, we still do not understand the “man bun.” We’ll take that one day at a time, I suppose.

 

BPetersonBlake re-joined Cushman & Wakefield in 2014, bringing 15 years of experience in property management, specifically in operations, construction and finance.  As a Director with the Asset Services group, she currently oversees more than 3 million square feet of Class A commercial office space in downtown San Francisco, servicing institutional grade investors.  Ms. Peterson oversees all physical operations, lease administration, long range planning, financial reporting, and contract management.  She upholds the highest service standards for her staff, which includes managers, engineers, accounting staff, and administrative support personnel.

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