Luxury amenities boosting occupancy rates in office properties
Midwest Real Estate News spoke to Helenia Madrigal, Director of Interiors, about the difference that amenities can make.
Midwest Real Estate News: What are some of the amenities that are becoming more popular in office properties? Helenia Madrigal: During the last five years or so, I’ve seen several amenities that have become important for office buildings. First, there is the addition of significant conference areas, rooms that can fit a couple hundred people. In these conference rooms, they’ve gone from very basic phone plug-in environments to very high-tech AV systems. They are doing teleconferencing. They have TV monitors. They have all the bells and whistles.
On the flip side, I’ve seen impressive bar and lounge areas that have been developed in office buildings. In some cases, there have been roof-deck environments. Many office buildings are adding on-site fitness centers.
MREN: What impact do these higher-end amenities have on office buildings? Madrigal: In the buildings we have worked on, the ones in which we have added amenities like these, the occupancy rates started at around 70 percent. By the time we were done with the amenity spaces and a year had gone by, these buildings were usually at occupancy rates of upwards of 90 percent. These spaces do draw in tenants. People, tenants and companies are looking for convenience. They want to come into their office buildings any time of the day, five in the morning or nine at night, to work out. They want to be able to have a little office party that can happen in on-site bar and lounge areas.
In one of the buildings I worked on, there is a full-service kitchen area. That is a pretty intense add to the office building. People can come to one of the floors of the building, without having to walk outside, to have a full-blown gourmet lunch at a reasonable price. That’s the type of amenity that tenants like.
MREN: We are seeing these amenities in urban offices in the center of cities. But what about in suburban locations? Madrigal: In the suburbs, the amenities are all about convenience. When you go to work in the suburbs, you might have more of a drive to get to the office. You might be there eight to 12 hours a day. It might not only be the place you work at. It might also be the place you go to eat and to workout. So those type of food and fitness amenities are important in suburban locations and can make a difference in attracting tenants.
Then there are the meeting spaces. Many suburban office buildings are offering larger meeting rooms. This way, companies don’t have to find an outside location for a meeting every time they want to meet with a group of more than 15 to 20 people. Anything that can help companies avoid wasting time driving to locations for a gathering is an important amenity in the suburbs.
MREN: Why are we seeing a growth in these amenity types today in office buildings? Madrigal: Maybe building owners are now realizing that offices are not just a place for people to come in and work. Maybe they realize that after so many years. The more you can offer people, things that are important to them, the more attractive your building is. Look at fitness. Fitness is such a big trend right now. People use fitness bands to track their steps. Office buildings that have their own fitness centers gain a significant advantage. Those who give everyone a chance to work out for half-an-hour and go right back to work are offering something that people want.
The changing trends we are seeing, everything from people spending more time at work to the boom in fitness, are a changing the mentality of business owners and developers. It is no longer enough to offer just an office space. The idea of convenience and being able to do more in less time is coming to the forefront. Building owners are recognizing that. The trends come from us, those of us who inhabit the office spaces. There is a demand out there. Developers and building owners are seeing it.