From fringe to forefront: How office amenities can draw top tenants, employees
Construction isn't the only industry dealing with a labor shortage. Across the U.S., businesses are facing a retiring baby boomer generation and are struggling to come up with ways to tap into a pool of potential employees.
To combat the problem, some firms are picking up shop and moving to where they'll have the best chance at finding that future workforce. Chicago has become the most recent example of this trend. McDonald's decided to relocate to downtown Chicago from the suburbs, as did ConAgra and Kraft Heinz. Even equipment giant Caterpillar, which has been a part of the Peoria, IL, landscape for 100 years, announced in February that it plans to relocate its global headquarters to Chicago.
"Companies want to find that rock star," said Michael Lanning, president of the Institute of Real Estate Management and senior vice president at the Kansas City, MO, office of Cushman & Wakefield. "They have to go to where the workforce is if they want to grow."
That workforce is largely concentrated in walkable, urban metros, and millennials have staked out their territory in neighborhoods where they can, for example, bike to work and socialize close to home.
Now, the question is: What actions will these companies take to win the race for the best and brightest once they've made the decision to relocate? Commercial office owners and developers think they have found the answer — the right amenities.
Offering extra services isn’t anything new, according to John Dempsey, principal of commercial development company CA Ventures' CA Office division. Corporate landlords have long offered small, shared conference rooms and perhaps coffee or an onsite sandwich shop.
But time has left those basic features in the dust. Amenities might not even be the correct word anymore for the biggest draws. "The definition of an amenity is a pleasant feature," Dempsey said. "Amenities today are about survival."
These vital extras are what distinguish one office environment from another, and the list of amenities that should be moved to the must-have category starts with technology.
"If you're thinking about convenience, if you're going to be spending all that time in the office, then it's about higher internet speed," said Michele Krause of legal firm Ginsberg Jacobs in Chicago. Reliable and fast connectivity, she said, is a factor that prospective tenants rate as a key necessity.
For high-rises and large office space, Dempsey noted, a distributed antenna system (DAS) is critical. Through a network of strategically placed antenna nodes, a DAS allows for seamless cell phone use and Wi-Fi throughout the building, elevators, parking garage and some distance beyond, depending on the system's capabilities.
"For a business person who's constantly moving, it's essential," he said.
If an office doesn't have up-to-date technology, Krause said, then a lease deal with a growing, vibrant company is a nonstarter. Commercial landlords need great tenants just as badly as those tenants need talented workers, so it's to their benefit to add the basic features that appeal to the widest variety of clients.
Office infrastructure and design
Adequate office infrastructure is a key feature that is frequently overlooked, according to Erin Wendorf, vice president of Transwestern in Minneapolis. "The infrastructure of a building is essential in creating a unique space," she said.
Elevators, HVAC systems, boilers and electrical wiring must be able to support a comfortable and safe workplace. "Otherwise," Wendorf said, "you're not going to be able to have the platform to create what you want to create in the space."
"The days of the cookie cutter space are over. [Tenants] want to customize the space and make it unique and different from competitors."
Senior vice president of Kansas City, MO, office of Cushman & Wakefield
Wendorf added that companies are consistently drawn to those "cool, creative" environments in converted warehouses or historic buildings, but even the excitement of working in a unique space can wear thin if the air conditioning goes bust in the summer heat.
Office design is another feature that isn't just a nice extra. Today's tenants are demanding flexible, collaborative space mostly because their growing millennial workforce is insisting on it, just as they are on technology.
And that office flexibility needs to be fast. Multipurpose conference furniture and chairs play into that trend, Krause said, so workers can go from solitary work to small group collaboration to large conferences in just a few minutes.
"The days of the cookie cutter space are over," Lanning said. "[Tenants] want to customize the space and make it unique and different from competitors."
A new take on amenities
Then there's the convenience-based services that truly claim the tag of "amenity." In February, building owner and developer Tishman Speyer announced its new Zo program for tenants, which provides access to emergency child care, an on-call nurse, food delivery, rideshares, a travel agent, volunteer opportunities and a beauty service, all in an effort to help their employees achieve a better work-life balance.
"Employees are doing a lot more than working [in an office]. You're living in that space. Life happens there."
Vice president of Transwestern in Minneapolis
Health and fitness spaces are a popular feature, but landlords who don't have the space to build one onsite don't need to worry. "I see gyms being used regularly, but for those office buildings that don't have the capability to install one, they offer a discounted rate for joining a gym," Krause said.
Whether referring to a gym, dry cleaning and shoeshine services, food delivery or just an easy place to have coffee, it all comes back to convenience, especially for two-income families.
"You've got two adults in a service industry, in a white-collar work environment — two adults who went to college and incurred debt," Dempsey said. "To make life meaningful, they need the help."
Today's workforce is looking for a balance, and a cold, indifferent workspace isn't on their radar, Wendorf said. "Employees are doing a lot more than working there," she said. "You're living in that space. Life happens there."
Landlords and employers need to ask themselves what employees' basic needs are, Wendorf added, and decide how they'll respond. "We [need to] predict and service those expressed and unexpressed needs before they're even an issue," she said.
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