If the content at this year’s BOMA International Conference in Salt Lake City is any indication, the CRE industry seems to have accepted that its job is to help occupiers attract and retain talent. In itself, that’s a remarkable development given the traditional “B2B” nature of the building-tenant relationship. It means that the experiences of individual tenant employees are now paramount. This is an exciting shift and one that is spawning a whole wave of creativity and competition in CRE. But we’re still figuring out what approaches will work best.
One initial approach building owners and managers are taking are to lean hard on adding amenities. According to CBRE’s Americas Occupier Survey 2018, 81% of corporate occupiers “perceive amenities as integral to the employee experience and enhance landlords and other service providers to enhance these offerings.” And our own Tenant Experience Gap Report shows over half (55%) of building management teams plan to increase spending on amenities in the next year.
Amenities ? Tenant Experience.
This investment in amenities is essentially throwing money at the problem. It makes some sense – a physical amenity is demonstrable “proof” that you care and that you’re investing in tenant experience. It’s trendy. But it’s also expensive. And it’s leading to an unwinnable amenities war that may not be necessary.
Can the organizations invest in top-of-the-line physical amenities define and articulate the experience they’re trying to deliver? Or are they spending money because they think they have to (because everyone else is)? To provide a differentiated tenant experience, you need to understand what it is. What makes people happy to work in your building? What do they value most about where they work? Does a coffee shop or nice furniture in the lobby really make or break the experience?
So, What IS the Tenant Experience, Anyway?
There are so many factors that impact the tenant experience that it can be hard to wrap your head around it all. The key is to think holistically. It’s not just about the neighborhood or the amenities or the quality of the space or company culture; rather, it’s about a mixture of ALL the things (and more!) that individual occupants encounter during the workday.
Property teams need to recognize that the tenant experience begins long before someone even walks into the building. It starts in the neighborhood – what’s around the building. Where are the restaurants, coffee shops, train stations, parking lots, etc.? Then there’s the building itself – where we spend most of our brain time. Following that, the suite, which reflects the company’s culture. Of course, all these are centered around the individual tenant employee.
Taking a deeper dive into this construct, it’s important to understand that there is another dimension to each of these elements that impact the tenant experience. There is what we will call the “hard” product we deliver. The hard product is comprised of the physical aspects of a building and its neighborhood (I.e. the office layout, lobby, gyms, restaurants). Then there’s the ‘soft’ product – the services, the feelings, the intangible elements of a work environment (I.e. company culture, public safety, breathtaking views).
Of course, if you’re a property manager, your team will never be directly responsible for providing every element in the end-to-end tenant experience. After all, you can’t just pick up your building and drop it in a prime location, nor can you control everything that happens within each suite. But it would be foolish to ignore these aspects of the experience because they are a big part of why people are at your building! Furthermore, you should take advantage of the fact that no one is better positioned to connect all the elements together and present them in a cohesive way that positively impacts the tenant experience – and differentiates your building.
So how, exactly, should property management teams go about this? Well, every building will be a little different. But there’s lots more to say about the best approaches to take. Stay tuned for Part 2 of this series for more on managing toward something holistic and unique that helps you win in an experience-focused market.