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What REALLY Matters In The Tenant Experience? The Hierarchy Of Tenant Needs

What REALLY Matters in the Tenant Experience? The Hierarchy of Tenant Needs

Improving the tenant experience is at the top of the current priority list for CRE property owners and managers. According to our recent Tenant Experience Gap report, 80% of property teams plan to spend at least half of their time improving the tenant experience in the next year.

What’s driving this? One reason is that improving and creating the right workplace experience is also high on the list for building occupiers...their tenants. According to CBRE’s 2018 America Occupier Study, 81% of corporate real estate decision-makers are engaging with landlords to assure they deliver the environment and amenities needed to attract and retain talent. – 59% of these occupiers surveyed also plan to introduce new technology to facilitate the employee experience within their own firms. 

Attempting to help satisfy this need for landlords are a growing number of new “Tenant Experience” mobile app companies. Several CRE firms are piloting these apps today and a few have made direct investments in the companies that developed them.  

While the CRE industry figures out which apps to test, and then whether they are adopted and have the desired results, we plan to stay focused on two things. First, leveraging what we’ve learned in nearly two decades of implementing low-friction tenant-facing solutions, to help the industry better understand and define what, exactly, “tenant experience” truly means. And second, improving what we know works well by delivering new, innovative ways of helping management teams connect, communicate with and serve tenants better. 

CRE may be getting a bit distracted from what really matters. 

While the current “shiny object” syndrome is understandable,  it may be helpful to ask a few questions about what really makes a difference and carefully consider an individual’s actual daily life at work  

  • Will curated discounted offers from in-building and nearby restaurants and service providers change the perception about the building, management team or office space that isn’t functioning optimally? 
  • Will amenities such as in-building gym facilities, meetings rooms, bike storage, and shared community space make an unhappy employee feel better about their job? 
  • Is the building location the thing that is actually most important to someone’s perception of the workspace? 
  • Is it a safe and secure building and workspace? – Or is that something occupants only think about when something goes wrong? 
  • Would you rate the general appearance, maintenance, and upkeep of the building highly?
  • Are you comfortable at work in terms of temperature and impact on your ability to do your job?  

These would all impact someone’s work experience in some way, but perhaps not equally. 

If that’s true, then the question you need to ask as a building owner or manager, is where you really need to invest to meet the expectations of current and potential tenants? –  What should take priority and what is just a nice-to-have?

If you’re focused on only one or two parts of the overall experience or don’t get certain things right first, you may fail to capitalize on investments you’re making in amenities and new systems as well as your opportunity to differentiate from competitors.  To effectively deliver the optimal “tenant experience,” you really need to start with a solid foundation first.  

What really matters in the CRE tenant experience: 

A helpful way to approach this is to think less about “tenant” needs and more about human needs. If you took Psych 101, you are familiar with Maslow’s Hierarchy of Needs. 

To refresh, for human beings to reach the top of the hierarchy and achieve true fulfillment, our fundamental needs, (food-water-shelter, etc.) must be met first – those are at the bottom of the pyramid. 

While esteem and self-actualization are certainly worthwhile states to achieve, we don’t need them to live a content and productive lifeAnd they can’t be achieved at all unless the foundational items are in place. You can’t be your best self if you don’t have adequate food, and shelter. 

The CRE Tenant & Occupant Hierarchy of Needs: 

So how does this relate to the tenant experience? Let’s work from the bottom up:  

Must-Have: Operational Excellence

Tenant employees need to be comfortable in order to be productive at work. They must feel safe, have access to a clean and functional space and have quick and clear communication with property management teams when they need it. These are some of the conditions and factors that must be achieved and in place before anything else: 

  • Temperature and Air Quality Control – Poor air quality can reduce productivity by 33%!
  • Safety – Well-lit exteriors. Well-maintained and functioning entryways, elevators and stairs. Secure processes for allowing access to visitors and vendors. Detailed fire and life safety policies plans and procedures. These are things tenants need to feel safe and secure at work. If these don’t’ exist, will they really care about bike storage or discount manicures? 
  • Building Appearance – Maintenance, inspections, and upkeep matters. People need to be comfortable to perform optimally and the quality and cleanliness of our surroundings day-in and day-out reflect on us and our firms. 
  • Responsiveness & Communication – can tenants easily request service, report an incident, reach management personnel and the information they need when they need it? Is it simple, intuitive, and quick? Are you in touch quickly when entrances are closed, or maintenance is happening? – Only 25% of tenants feel they are consistently receiving important information from building management teams. These must exist before you can consider amenities or other “experience” programs.  

Operational excellence is not optional. Without that, nothing else on the pyramid matters in creating and delivering an optimal tenant experience. These are the conditions you must have down pat in the fight to attract, and retain, happy tenants.  

Niceto-Have: Amenities 

The Tenant Experience Gap report found 28% of CRE teams plan to spend 25% or more of their operating budget on amenities in the next year.  

These amenities are often thought of as essential in differentiating one property from another in similar locations. They can include things such as gym facilities, bike storage, conference rooms that can be reserved for meetings, shared community spaces, in-building food and retail options, outdoor spaces, and even, daycare. All of these undoubtedly make for a better experience at work, but then again, can’t have their desired impact if the previous foundational elements aren’t in place and functioning optimally. 

Additionally, the same report finds that tenants and building owners don’t agree on which amenities contribute to a positive workplace experience:  

And you can even see in this example, there is even often a disconnect between what kind of amenities tenants really want and what their landlords and management teams think they want.  It’s important to do careful surveying and analysis of the things your tenants will consider important before making a significant investment. 

Cool Perks: Convenient Services and Discounts 

The perks that fall into this category are exactly that – luxuries that tenants don’t necessarily need, but maybe fun to occasionally take advantage of.  

Included in this category  to round out the tenant experience are things like consumer and community-based offerings such as dry cleaning, prescription order and delivery, dry cleaning pick-up and delivery,  information services like local transit conditions and promotion and access to discounted services such as yoga classes, on-site manicurists, as well as food and beverage options 

It’s interesting to also note from our research, building occupants think these are some of the over-rated amenities and services: 

  1. Nap pods 
  2. Electric car chargers
  3. Car wash
  4. Concierge service
  5. Dry cleaning pick up and drop off
  6. Cell phone charging station
  7. Personal package pick-up
  8. Bars

Again, while these might be nice perks and used occasionally, not only might they be things tenants in your building don’t really want, none of them by themselves are likely to make a significant contribution to great workplace experience. They may provide a certain level of convenience, but at the end of the day, if an HVAC unit is not functioning adequately on an 80-degree day and people are too uncomfortable to focus on their work, they will not be too concerned with a discount for coffee that the building is offering.  Comfort comes first. Always.  

The Bottom Line: You can’t skip the foundation.

Without a solid operational foundation to manage the things that impact a person’s workday the most, property teams are ill-equipped to meet the needs of the modern tenant experience.  

All three tiers of the pyramid matter in differentiating your property and providing a means to tenant retention and attraction– your ultimate goalsBut it is key to remember that the pyramid must be built from the ground up. It must start with a foundation.  

Just like Maslow’s Hierarchy of Needs, the tenant needs at the base of the pyramid must be satisfied before they will care about the things at the top. The second tier of nice-to-haves include amenities that positively impact the workplace experience and help a property differentiate. At the very top of the pyramid are cool perks – these services and add-ons are nice, but not essential. 

For our industry to navigate the road ahead in the world of tenant experience, we must prioritize from the bottom up – property operations matter. 

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