The Office Amenity “Arms Race”
Have you ever seen a rock-climbing wall… in an office building?
We hadn’t until recently, when our team was working on a budget to amenitize a struggling office building. We noticed a rock-climbing wall on the plans. Our initial thought of, “Wow, this is crazy!” was quickly reversed when we reached out to a manufacturer about pricing who wasn’t surprised at all.
In today’s commercial market, building owners are competing for tenants and thus seeking ways to stand out from their competitors. Rock climbing walls are just one of the creative solutions they’re hoping will set them apart and boost occupancy.
This trend to liven up office space may come as no surprise when you consider that global tech companies like Google, Microsoft and Facebook have been doing this for years to attract – and retain – top talent. They pioneered the open office concept (whether or not this is a good thing is still debatable), and created spaces for their employees that include perks like stadium seating, bowling alleys and slides that go from floor to floor.
While some of that may be overkill for the general workplace, the same driving principal holds true: office buildings need to find ways to activate their spaces, increase tenant comfort and promote a sense of community. Landlords are realizing this, as evidenced by the increase in tenant improvement (TI) allowances in recent years. A JLL study found that spending on TIs rose 10 percent in 2017 and 13 percent in 2018.
And why stop at a rock-climbing wall or fitness center? Some building owners are incorporating amenities such as hotel-inspired lobbies, communal spaces, cafés and baristas, game rooms and golf simulators, meditation alcoves and, our favorite, nap rooms.
Roger Heerema, principal at Wright Heerema Architects, said it best when he called today’s commercial real estate market an “office amenity arms race.” With a tight labor force and plenty of available office space, landlords are competing to get the attention of corporations. I recently met with a local property manager who noted that they just invested $25 million into a single building because they were losing a large tenant from the lack of amenities.
At Northpoint, we have vast experience upgrading and adding amenities in office buildings throughout the D.C. metro area. In recent years, we’ve seen features such as fitness centers, conference rooms, lounge areas and lobby renovations become the norm. Our team loves transforming these workplaces. The potential for adding a rock-climbing wall to our resume is definitely a direction we can’t wait to pursue.
Are you the owner of a commercial real estate property that needs some help competing in this ever-growing “office amenity arms race?” We would be thrilled to offer you some ideas and plans to get your building up to speed. Regardless of whether you are looking to add a fitness center or are considering a unique amenity that makes you really stand out from the competition, our knowledgeable team can find creative ways to maximize your budget and make your office space a destination that attracts and retains tenants for years to come.
Sources
https://www.hqo.co/blog/the-craziest-office-amenities-in-the-workplace
https://www.forbes.com/sites/jacquelynsmith/2013/03/08/10-cool-office-spaces/#2acf8aa91806
https://www.curbed.com/2019/4/30/18523586/office-space-commercial-real-estate-wework-design