By: David C. Smith, Vice President, Americas Head of Occupier Research
Originally published on LoopNet.com, June 21, 2019
Experts say that the full earning potential of real estate is achieved when it’s no longer merely a commodity, but an experience. Retail stores create customer experiences to compete with e-commerce disruption, and technology firms obsess over the user experience being seamless and personal. Companies in a competitive job market need to focus on the employee experience as a way to attract and retain talent, and create a culture that drives innovation, productivity, and excellence.
An employee’s experience is not only determined by their supervisor or human resources department—it also depends upon the nature and quality of the office itself, the building, the neighborhood and workspace. The “real estate as a service” mindset is gaining traction as occupiers focus on employee needs and look to landlords as partners in creating environments that are attractive to today’s workers. To that end, occupiers and landlords alike seek the right mix of amenities to create an environment where the workforce can thrive.
Which amenities are most in demand today? Let’s take a look by category:
Entertainment (bowling alleys and golf simulators, for example) and high-end food options (coffee bars and wine lounges) receive much of the media buzz. These certainly can generate energy, impress tenants, and serve as a differentiator. However, there are other “basic” amenity offerings that tenants increasingly expect to find at every office.
As work and personal lives intersect to a greater degree, employees have increasingly high expectations that office buildings integrate, or are at least in close proximity to, personal amenities that they can’t otherwise access during demanding work weeks. Many consider easy office access to food options and personal care services to be key in determining whether a job situation is a fit. These can include:
- Food options at different price points, from fast casual to upscale
- Fitness centers
- Other retail (i.e., drug stores, financial services)
Although some of these overlap with creative offerings in the top section, they serve base needs for corporate occupiers.
Technology Amenities (“PropTech”)
This category is growing in both prevalence and importance. Young adults grew up surrounded by technology, and workers of all ages are by now accustomed to applying tech solutions to professional and personal challenges. Artificial Intelligence and the Internet of Things enabled a better understanding of the workplace—using sensors to measure air quality, energy usage, and mobility patterns, as well as space usage. Technology can also be utilized for preventative maintenance, task automation and direct access to services/partners. Buildings can integrate technology through:
- Phone apps providing directions, building calendars, special discounts
- Common area & conference room space reservations
- Automation of check-in, security, lights, etc.
A deeper understanding of the connection between health and productivity has lead to a growing focus on employee wellness in the workplace. Physical amenities provide respite from one’s desk, adding a touch of nature and revitalization to the workday. Consider providing:
- Outdoor courtyards and terraces
- Yoga or other fitness classes
The “amenitization” of the workplace is still in a relatively early stage. Most headlines come from tech companies, coworking spaces or high-end sub-markets targeting hip companies and young talent. However, expectations are changing, and demand will filter down to other office products and occupier types. Investors and occupiers should be proactive in differentiating themselves with the right amenity mix.
David Smith is the Vice President, Americas Head of Occupier Research. He produces occupier thought leadership content for the Research Center of Excellence and directs a program of market presentations, written analysis, surveys, forecasts, and data collection that supports Global Occupier Services and the brokerage business, as well as advance the strategic plan in Americas Research.