smart apartments

The Amenities Tenants Want Are Only Half the Story

There’s little doubt that amenities have become a major focal point of buildings, whether office or multifamily, in recent years. The offerings now on the table are amazingly diverse. Inc.’s list of 2019’s 10 Most Beautiful Offices includes spaces that bring seating for your dog, heated floors, and museum displays, all of which are head-turning amenities that represent the cutting edge of what workplaces have to offer.

In addition to these perhaps more impressive amenities, there are a range of more typical amenity offerings like dry cleaning pickup, dog walking spaces, and package lockers. These form an additional layer over the most standard amenities, like simple laundry rooms, recreation areas, and other less eye-catching options.

Beyond that classification, there’s also the differentiation between physical amenities, like those laundry rooms and more advanced options like co-working lounges, and services like dry cleaning pickup, yoga classes, and related offerings.

However, all these amenity choices are not created equal. Some have a bigger impact than others and consequently represent a more important offering for property managers to provide to their tenants. Based on State of the Property Management Industry Report research conducted by property management software company Buildium due out in a few days, the community amenities that residents say they prefer are much more fundamental, things like garbage pick-up, laundry room, reserved parking, and social spaces like a yard, patio, or roof deck. And in the unit itself, things like washer/dryer, central air, and being pet-friendly count the highest.

That should raise some eyebrows. It isn’t the dog chairs or heated floors that commands the real estate headlines, it seems that it’s these comparatively basic amenity choices that really satisfy tenants. However, this seeming emphasis on the basics of the property experience disguises a more important dynamism within the business. Buildium’s CEO, Chris Litster, added that “we’ve been talking a lot lately about how property management increasingly resembles the hospitality industry—needing to provide a high-touch, customer-centric strategy that focuses on delivering a personalized experience. Property managers have the opportunity to lean on technology to handle the transactional parts of the job and power good communications with residents, but it should all be in service to a strategy that creates an excellent resident experience.”

In highlighting the growing emphasis on hospitality for the property business, Chris also calls attention to the importance of appearances for attracting tenants. It likely isn’t enough to offer a tenant experience that checks off all the boxes on paper; landlords need to portray their building as a standout, or at least a contender, within the competitive set. In other words, even if a building’s tenants don’t necessarily fully utilize the more “blingy” amenities, like a library or recording studio, it may still be important to offer them for the sake of advertising optics. Just like gymgoers often buy memberships only to skip out on their workouts, is it really important if people actually use the amenities themselves, if knowledge of their presence helped tenants sign leases?

The lesson for owners, then, is that spaces should be kept as flexible as possible. Allowing the co-working lounge to feature on marketing collateral and the website, but reconfigure into a more general-purpose lounge once the building is tenanted, is one way to have your cake and eat it too. Owners can focus on offering the kind of amenities that don’t lock spaces into single uses; a multi-use yoga and meditation room is a lot more flexible than a rock climbing wall or even lots of weights. Partnerships are another avenue for owners to use to fill in a building with “cool factor” amenities without tying the space down too much.

Building management is a constant balancing act between costs and service offerings. Understanding how the reality of what tenants want can differ from what the market dictates buildings need to have to remain competitive is just one part of that tightrope.

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