In recent years, there has been a growing emphasis on using amenities at commercial real estate (CRE) properties as a way to attract and retain tenants. However, the data is showing a shift in investor sentiment towards adding amenities to office spaces. It raises the questions: Are amenities still demand drivers for office space? And what is this commercial real estate amenities evolution so many people in the industry are seeing?
In a recent study, “The state of commercial real estate property management for 2024,” Building Engines found that CRE professionals may be uncertain about adding amenities to their buildings. Let’s dive deeper into what those CRE professionals are saying and how we can expect the industry to shift this year.
Investors grow uncertain about adding amenities
The narrative about amenities last year was that CRE companies were spending big to get more people excited about coming back to the office. The data shows a flip in certainty about amenities in 2024.
According to the report, the percentage of respondents planning to add amenities to their buildings decreased from 39% last year to 28% this year. Additionally, the percentage of respondents unsure about adding amenities increased from 27% to 39%. This indicates growing uncertainty and hesitation among investors when it comes to investing in amenities.
There could be several factors contributing to this trend. Financial constraints may be a significant hurdle for many investors, especially in uncertain economic times. They might also be questioning the expected return on investment for amenities, especially in the face of changing office work culture, or there might simply be less of a demand.
Top 5 amenities property teams are adding to buildings
Despite this shift, there are still amenities that continue to be popular choices for property teams. The report asked the 28% who said yes to adding amenities what they plan to add. Below are some of the most common amenities being added to buildings across the board.
- Conference rooms
- Tenant lounge
- Gym/fitness center/wellness options
- Outdoor spaces
- EV charging stations
Some amenities, such as conference rooms, tenant lounges, and fitness centers, remain popular choices which may resonate with a changing focus on flexibility and employee wellness in the workplace. They also align with the changing needs and priorities of tenants, such as fostering collaboration, promoting employee well-being, and supporting sustainability.
The commercial real estate amenities evolution
While the demand for amenities in office spaces may be experiencing a decline, there are still certain amenities that remain attractive to tenants. The key for CRE professionals is to carefully evaluate the needs and preferences of their target market and prioritize amenities accordingly. Flexibility, wellness, and sustainability are themes that continue to resonate and should be considered when investing in amenities for office spaces.
For more insights like the ones discussed in this blog, download the full Building Engines report.
