Real Estate Marketing & Beyond
Businesses are investing in more upscale workplaces in an effort to lure workers back to the office.
They’re looking to buy more spacious premises with amenities and perks such as custom-built lounges, games rooms with ping-pong tables and foosball, outdoor areas including spaces with fire pits for diners. They’re also looking to renovate existing premises to add the same. In addition, many are looking to installing better ventilation and sanitation systems, and create apps that allow workers to contact building security or order food.
“It’s all about how do we as landlords create an environment that gives their tenants and their employees no excuses not to show up,” said Jeff Eckert, head of JLL’s U.S. office landlord representation business, in an interview with the Wall Street Journal.
Market watchers say amenity-rich office spaces are driving the rebound in the commercial real estate sector. Leasings plummeted during the early stages of the COVID-19 pandemic as remote work took off. The office vacancy rate in the U.S. is still at 16.8% though, the highest number since 2010, according to data from the real estate firm CB Richard Ellis Group.
However, as companies look to get their workers to return to the office, they have realized there’s a need to make those workplaces more enticing than they traditionally have been.
“The top of the top has just gone crazy,” said Mary Ann Tighe, chief executive for CBRE Group’s New York region.
For example at 730 Third Avenue, New York, the owner of the building, Nuveen Real Estate, is upgrading the space in a big way to lure workers back, Commercial Observer reported. It has added outdoor terraces, a food hall and a fitness center to the place, as well as two beehives on a seventh-floor terrace that will produce honey that will be offered free for all office workers. In addition, the building has a lounge area with two full-swing golf simulators for those who want to take a swing at virtual golf. The building also hosts regular karaoke nights and wine tasting sessions, plus electric scooters to help employees get around the premises faster.
Nuveen’s New York director of investments Brian Wallick told Commercial Observer the new amenities are all meant to make tenants feel more comfortable. “Certainly with what's gone on in the last one to two years, you need to have amenities in your building that excite people who are coming back to the office.
Law firm Venable LLP is following that advice, having recently signed a five year lease on an office space in New York City so it can offer an improved space to tempt back its employees. The new office includes a private balcony with a view of the Empire State Building, plus a cafeteria with a menu overseen by celebrity chef Charlie Palmer.
