EXPLORING THE MODERN TENANT EXPERIENCE

By: Ashley Simien, Cousins Properties

Will an increased desire for a better tenant experience continue to influence the Commercial Real Estate industry? A priority for many landlords has been to create a positive and engaging tenant experience. Tenants want their employees to come to work and enjoy convenient on-site amenities and neighboring properties. Many landlords pride themselves on a diverse mix of tenants to enhance their relationship-building experiences within the buildings.

Several companies have approached landlords and developers with detailed specifications for building the perfect tenant experience for their company. The tenant’s human resource department plays a critical role in providing input for the building’s design and selection of amenities.

According to the software company ButterflyMX, “More than ever, tenants believe the workplace experience increases employee satisfaction, which increases the tenant’s ability to recruit and retain top-tier talent.” Recruitment and employee retention are recurring themes when discussing the tenant experience. Landlords contribute to the success of a company by providing spaces that enhance the employee experience.

NEXT LEVEL AMENITIES

Landlords have had to reevaluate the amenities offered based on tenant demands for their workforce.

According to Deloitte’s 2021 Commercial Real Estate Outlook, “Digital transformation and tenant experience are a business imperative.”

Providing modern conference centers with digital booking systems and teleconferencing abilities has become essential. As a result of this demand, providing access to these digital booking systems has drastically changed from working within a work order system or a call to Property Management. Many have adopted tenant experience platforms that provide curated experiences for all building occupants. These applications provide real-time updates that can help create a community that supports surrounding tenants, especially in mixeduse properties.

Moreover, landlords should promote their environmental, social, governance (ESG) as an amenity instead of a company requirement. According to the ESG software company Measurable, there is a “marked shift in tenant and consumer expectations—they expect a high degree of sustainability in the places they live, work, and shop.” Goby’s report on ESG in CRE said, “Research from Morgan Stanley found that millennials are two to three times more likely to want to work for organizations that share their values, particularly when it comes to environmental and social issues. The ability to show progress in sustainability is becoming an increasingly valuable tool in attracting and retaining top talent.” As important as it is to acquire top talent, it is equally important to retain top talent.

In 2019, the CEO of Scoop Technologies Inc. issued a State of the American report that stated 62 percent of Americans would not apply for a job based on the commute and 30 percent have considered quitting their jobs because of their commute. As a result, many companies now consider public transit to be a part of the tenant experience. The advent of rideshare services has to be considered by companies when discussing employees’ commuting experiences. Cushman and Wakefield’s report on Mobility Shifts in Commercial Real Estate implies that rideshare services provide a convenience that is not received when commuting in your own vehicle or via public transit. It is essentially a door-to-door service that saves time from a traditional commute.

The need for drop-off and pickup areas around commercial buildings is increasing. Providing safe areas for tenants to access these services creates a positive experience.

In addition, health and wellness are a top priority for many tenants. According to NAIOP, “Companies compete for the best workers with packages that extend beyond salaries and bonuses. Amenities such as cafes that feature locally sourced food, ample fresh air, and rooftop gardens play a pivotal role.” Providing areas for employees to take breaks from their computer screens or refresh their minds after an afternoon workout provides a great incentive to tenants and their employees.

Overall, amenities can make or break the tenant experience, and landlords must consider the needs of tenants when considering leasing trends.

COVID-19 AND THE TENANT EXPERIENCE

Due to social distancing, amenities that once created an amazing tenant experience had to evolve to a virtual model. Buildings once buzzing with thousands of people and events became nearly vacant.

Many landlords and tenants were left to find ways to continue to engage employees who now worked from home.

Before the pandemic, hybrid working models were becoming the norm. Tenant spaces were crafted to allow for hoteling and workforce flexibility. Office hoteling not only allowed for increased collaboration and teamwork, but it set the stage for companies to utilize a higher office density model. This left tenants with the task of finding ways to implement social distancing measures and more work-from-home opportunities.

In conclusion, landlords must create value for tenants to encourage them to return to the office. Being able to provide amenities that enhance their experience should outweigh the benefit of tenants working in comfort of their own home. Tenants do not have to experience commute issues, regulated breaks, or worry about their wellness in the comfort of their homes. We must find new ways to engage tenants and make the office lease more appealing than the work-from-home model. It is imperative we do so in order to compete in the evolving climate of the work place.

About the Author

Ashley Simien is currently a Property Manager for Cousins Properties. She has over 10 years of experience in commercial real estate and became a CPM (Certified Property Manager) through the Institute of Real Estate Management. Ashley holds a BBA in Business Administration in Management Information Systems through Sam Houston State University and an MBA from Texas A&M UniversityCommerce.