Tenant engagement has recently taken the commercial real estate industry by storm, grabbing headlines, deploying customer pilots, and raising large amounts of capital to bring the tenant-landlord relationship to the 21st century. They seem to have caught on first with office buildings, places where tenants demand a lot of their surroundings and have had the least amount of control over historically. The story behind tenant engagement technology is quite inspirational: giving a way for tenants to communicate with their landlords, control their building and be part of a greater community is a noble goal and something that can change the work lives of millions of people. However, hype, pilots, and funding does not guarantee long-term success.
When it comes to tenant engagement, real estate owners and operators need to be wary of “deploy it and they will come” mentalities for their tenant populations. The bigger opportunity for real estate owners is to look holistically at enhancing the complete building experience. By uncovering what tenants want most within their office building, their true needs and pain points can be better addressed, which will ultimately lead to stronger tenant engagement, increased retention, and higher asset values.
Regardless of one’s location, age, or line of work, people show up to office buildings everyday, first and foremost, to work. We all have the same experiences of getting slowed down by office place distractions that have little to do with our core job function, such as registering a visitor or fixing a broken coffee machine. Despite the trends of offering social events and consumer discounts to tenants, they will ultimately prefer any benefit that makes their jobs easier or saves them time. We learned this lesson after conducting a survey on the topic in May of this year. Our findings reinforce that tenants desire productivity solutions, which ultimately benefit both the tenants’ workplace engagement, as well as, the property owners’ bottom line.
To better understand what tenants want out of their office buildings, we designed a survey to ask people what they desire most across a range of building improvement options, including technology, physical amenities, and services. This helped the survey to avoid selection bias towards technology while allowing us to get a comprehensive understanding of tenants’ true needs and pain points.
Over 350 U.S. office workers participated in this survey, which represented a diverse cross-section of the office building-based workforce.
Over eleven industries were represented, including professional services, technology, healthcare, finance, law, real estate, insurance, manufacturing, advertising and logistics.
We gauged the importance of different amenities by asking participants to rank possible building improvements.
1- More physical amenity options, such as on-site gyms, restaurants and bars
2- Technologies that allow you to be more productive in your office building, such as handling visitor management, maintenance requests, parking and food ordering
3- A more aesthetically pleasing building and/or lobby
4- Mobile access card to the building via a smartphone app
5- Better and more timely communication about the building, nearby amenities and events
6- Additional concierge services, such as dry cleaning, onsite wellness classes, dog walking
7- Community engagement, such as networking events, tenant parties and tenant newsletters
Physical amenities such as an onsite restaurant, bar, or gym rose to the top of the list as the most important building improvement, which is hardly surprising given the innate desire to pursue food, drink, and exercise-based services. The second most demanded improvement was self-service technology that improves productivity, such as, food ordering, service requests, visitor management, and parking access. This improvement was deemed more important than building aesthetic improvements, concierge services or community engagement.
Findings:
Notably, most Class A commercial office buildings already have high-quality onsite physical amenities, which fulfill most of the respondents’ primary needs, yet many owners have also opted to renovate their building or lobby instead which can cost millions of dollars and provides less satisfaction to their tenants. The aesthetics of a building seem to be less important than the functionality for modern tenants.
Of the seven building improvement options listed, the least demanded was community engagement, such as networking events, tenant parties, and tenant newsletters. Contrary to the sentiment that professionals are intent on socializing at work, we found most would rather focus on being productive. Creating a building community is more relevant in co-working environments where members are commonly freelancers or entrepreneurs whose jobs require more social and professional networking. But for many professions, work comes first.
While physical amenity options ranked the highest in terms of importance to employees, technologies for improved productivity also did very well. Specifically, 34% of participants said they would be more likely to stay with their current employer if the office building provided self-service technologies that enhanced productivity.
To look deeper into digital technology’s role in today’s office environment, we asked participants how often they would use a smartphone app or web portal that provided specific features. What we found was that mobile access cards, food ordering, visitor management and service requests are the most likely features to be used (more than once a week). Further down the list, we found that access to information, community engagement, and concierge service capabilities were considered the least likely to be used. These features have garnered a lot of attention but seem to be the least important to the tenant. This means that owners and operators might be less satisfied with their investment if it is focused solely on community engagement without enhancing tenant productivity.
It’s important to highlight that when it comes to launching apps and web portals, tenants are looking for a single solution. This was evident through open-ended responses. When participants were asked what else they would like to see provided to improve their experience as an office building tenant, we received comments for “One app that manages all my building interactions,” and for “an app that controls my daily needs and streamlines ID cards, access cards, paying for food at the cafeteria, etc.” To understand this better, we surveyed a subset of individuals that currently have a limited-capability app deployed at their building. 89% stated that they are not using the app at all.
Much of the commercial real estate industry realizes the growing importance of providing a more immersive experience to tenants. But what still seems to be in doubt is exactly how to do that. Digital engagement technologies are a great tool for this, but only if you focus on what counts to the end-user. While there are a lot of amazing things that engagement apps can provide building occupants, what office workers really want is to be more productive at their job.
