The workplace we knew three years ago no longer exists. As various forces have shaped our work life over the past few years, tenants and their talent expect a new level of flexibility in their daily work routine.
Navigating these on top of changing economic dynamics as an owner is a challenge and there’s no playbook for what the future holds. But with the right insights, owners have so much opportunity to capitalize on what their tenants are looking for.
In an exclusive fireside chat with VTS CEO Nick Romito, Emma Buckland, Global President, Property Management, CBRE, and Jamie Hodari, CEO and Co-Founder, Industrious, the trio discussed current tenant trends and the future of office buildings.
Here are our takeaways from the dinner.
The workplace has expanded
The “workplace” is no longer confined to the four walls of an office building. Work happens everywhere; it happens in the office, at home, in that café you love across the street.
Tenants desire a whole new work experience. As Jaime Hodari said, “The buildings that feel fun are the buildings doing well. People can work from anywhere, they need to want to be in the office.” Tenant experience is exactly that — it’s the end-to-end experience owners create for their tenants and their talent. It needs to be a positive one if you expect them to increase the time they spend in the spaces you offer.
So how can owners best create a positive experience today? By maximizing every square foot. Showcasing your in-building or nearby retailers and shared spaces where tenants can collaborate are good places to start. Flexible workspaces and meaningful amenities are differentiators that tenants are seeking during today’s flight to quality.
By providing an expansive experience, owners can connect tenants to what they need, wherever they’re working.
Employees seek a hospitality-like experience
Emma Buckland said it well: “Property management has seen a shift, with an emphasis on community management needs.”
“Hiring for these types of roles is hospitality-driven, and now requires a special skill set,” she noted. “CBRE is in the service business — we’ve even created an academy to train teams to deliver a hospitality-first service approach to every role and responsibility.”
The way your occupants expect to engage with your space has changed, and so have their demands. While the “extras” of a building have always been appreciated, it takes more to delight occupants for that all-important renewal in today’s climate.
Demand, deals, and renewals are down
According to the latest VTS Office Demand Index (VODI) analysis, new office space rose 4.3 percent from January, marking the slowest pre-pandemic pace in February on record.
In short, tenants need less space. Deals and renewals are down — while there are various factors at play, waning demand can be largely attributed to the changing work habits tenants have adopted following the pandemic. While the US and Europe have been quicker to rebound, Emma noted that each city in the US has a unique dynamic and a need for a tailored strategy.
Tenants need answers, too
A large number of landlords don’t have insight into how tenants use their space. According to the 2023 Global Landlord Report, only 38% of landlords have the tools to understand how tenants are using their space.
Technology is key. “Companies used to have teams of people focused on engaging their talent — now they know they can’t do it alone. They’re looking for a partner in crime to help offer the experiences their talent want,” Hodari said. “Tenants and their talent need a digital overlay for the building to know what’s happening, when, and where, or else it’s clunky and painful.”
By harnessing technology and leveraging space usage insights, owners can double down on the experiences, spaces, and offerings that tenants crave and create a flexible workplace that meets their needs.
While location and commute are a factor, people also want to experience the neighborhood that surrounds a building, in addition to the experiences within the building.
The future of the office
The workplace has inevitably changed, and by recognizing this reset in workplace values, owners can get ahead.
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