The world keeps changing, and commercial real estate (CRE) has had to adapt several times over in such a short period of time. Just when you think you’ve got one thing figured out, everything changes again. One thing’s for sure: The workplace has changed forever. There’s no going back to the way things were before the pandemic. That means commercial landlords need to fill their spaces in new ways. Today, the focus has shifted to competing on the CRE tenant experience.
What is Tenant Experience?
First, we need to understand what tenant experience (TeX) is before we can begin to prove its value for the CRE industry. According to HqO: When thinking about a typical CRE tenant, many overlook the small details of their day. However, from their morning commute coffee to post-work activities such as doctor’s appointments or fitness classes, tenant activities are more ingrained in your building community than you may think. Even tenant actions outside of your building are all part of the tenant experience.
Developing this ecosystem is vital. Each tenant activity presents a new opportunity for CRE landlords to improve the property experience with technology tailored to the individuals who are in the building every day. And CRE landlords are certainly taking note. In our recent The State of Commercial Real Estate Building Operations for 2022 report, 49% of respondents expect tenant experience technology to be most useful to their business.
Here are 20 stats that prove the value of tenant experience for the CRE industry:
5 Stats on CRE Tenant Experience
- 92% of CRE landlords recognize that tenants want more from their buildings.
- 82% of property teams are planning to host on-site events in 2022 to increase tenant engagement with their property.
- 88% of CRE landlords say they believe data on tenant preferences is important to their overall business strategies.
- 90% of CRE landlords are planning to provide dedicated tenant experience staff or already do.
- 40% of CRE landlords view tenant experience leaders as primary decision-makers.
5 Stats on the Value of Amenities for CRE Buildings
- By 2025, CRE properties that incorporate a diverse roster of amenities will experience 12% higher demand from tenants versus their plain commodity counterparts.
- CRE landlords are spending big on amenities to attract tenants to the tune of: $125 million from Fisher Bros. on new art installations, a tenant lounge, wellness center, hybrid meeting spaces, and more; $40 million from Nuveen Real Estate for a new park, gym and wellness center, café work lounge, and new conference rooms; and $25 million from Aby Rosen’s RFR Realty for a basketball court, rock climbing wall, and town hall space.
- Blackstone spent $500 million to renovate and add 250,000 square feet of public amenities at its Willis Tower in downtown Chicago to attract tenants and locals to its office building.
- OKO Group is developing a Class A+ office tower in Miami’s Brickell neighborhood with design-led amenities, such as a rooftop bar/lounge and restaurant, views of the city and Biscayne Bay, a health and wellness center, conference facilities, an outdoor terrace, cafes and street-level retail. The building is over 60% leased with big-name tenants ahead of its projected completion this fall.
- The Fort Worth commercial office market, where many CRE landlords are working to deliver “live-work-play” spaces, has been facing increasing costs for construction in new-build projects and for capital expenditures and tenant finishes in existing buildings. Tenants in the market are accepting increased rents if CRE landlords contribute money for tenant improvement. There are five buildings totaling 297,500 square feet of Class A office space under construction in the city. Another 2.2 million square feet of projects have been proposed.
5 Stats on Sustainability & Wellness Driving Tenant Experience
- 46% of commercial building owners leased properties with healthy building certifications faster than other properties.
- More sustainable buildings attract higher-quality tenants and allow for higher rents, up to 10% more.
- 40% of real estate professionals see increasing demand for sustainability among tenants.
- 63% of leading investors strongly agree that green strategies can drive higher occupancy, higher rents, higher tenant retention, and overall higher value.
- Regarding wellness amenities in workplaces, 45% of people cited relaxation spaces as important to restoring their wellbeing and achieving sustainable performance; 44% of workers choose healthy food services as an important office amenity; and 41% of workers have put outdoor spaces in their top expectations for the workplace.
5 Stats on CRE Tenant Experience Software
- 80% of CRE landlords believe tenants want a comprehensive mobile app for the building.
- 72% of employers agree or strongly agree workplace experience and engagement tools will be critical for successful offices in the future.
- 64% of CRE landlords are increasing their investments in access control and visitor management technology, according to HqO’s “The State of Workplace Experience in 2022 Report,” and 44% are increasing their investments in work order and operations technology.
- Over 75% of CRE respondents in one survey said their companies will likely expand partnerships with or invest in proptech, which can help build partnerships to provide new offerings to tenants and enable real-estate-as-a-service (REaaS).
- The new workplace is mostly experienced through tech: Pre-pandemic, about 18% of executives suggested increasing their investment in digitization and automation by over 20%. Today, that portion is up to 34%.
How CRE Landlords Can Capitalize on TeX
The data tells a compelling story for CRE tenant experience. Focusing on tenant experience is the top way to compete as the workplace continues to shift. CRE landlords will need technology that allows them to engage and connect with every person in their building or office. Reach out to us to learn how you can integrate your building operations platform with tenant experience software to deliver the experiences tenants really care about.