A positive tenant experience will lead to better tenant retention and recruitment for commercial real estate landlords.
It seems like common sense, right?
Until recently, the phrase "tenant experience" wasn't even on the radar of office landlords. If it was, it certainly didn't have the same connotation that it does today due to the Connected Tenant's increased appreciation and emphasis on UX, brand, and tech.
One question we consistently hear from landlords now is, how will tenant experience and tenant engagement proptech really impact my bottom line? The most widely accepted thesis (with lots of data to support it already) points to the two R's:
Retention and Recruitment
This thesis follows a cycle of sorts:
- Individual professional happiness – There can be thousands of individual tenants in an office building and they spend more time at work than they do at home. If there is anything that a landlord can do to make tenants happy at the individual level, they are already helping their client's leadership team (who are business decision makers, by the way) win at their job. By using technology to cultivate personalized experiences, custom amenities, and an overall positive work environment, landlords take a whole lot off of the plates of HR and people ops teams by improving tenant morale. And when one professional is happy... --->
- Team trickle down effect – Departments and teams can work better together when there are opportunities for fun or unique amenities to experience together, team building activities, and environments conducive to spontaneous interactions and collaboration. When individuals experience fun things at work, a network effect kicks off immediately: they tell their friends, invite their coworkers to join them, and start to build better connections through real world experiences at work. By making all of this tech-enabled, a landlord can bring all of these experiences under the umbrella of their property's brand. When entire teams and departments are happy and cohesive... --->
- Happy business owners – That's right, you've made the people who pay you every month very happy. They feel like they are getting much more value for their money when they can see tangible ways that demonstrate how their office building is more than just a place where people come every day. It's truly a part of their company culture. While this new age of expectations around property UX, brand, and tech presents some challenges for landlords, you can't deny the immense opportunities it opens up simultaneously. The rest is history when it comes to positive branding for a landlord... --->
- WOM – Business owners will talk about their experiences with your property, good or bad. Wouldn't you want to be known as the office building that every innovative business wants as their HQ?
- The Wow Factor – This cycle can (and will) begin and end with the wow factor. When tenants come to look at your space, the attention you pay to amenities, experiences, technology, and community will stand out to them and create incredibly valuable reasons to choose your property over others (or WeWork, etc.).
Recruiting new tenants sounds like a pretty awesome reason to invest in proptech, am I right? But, at HqO, we challenge landlords to consider their existing tenants first and foremost. What experience improvements can you make today? What do your current customers want now?
I recently listened in on a VTS webinar called, The New ROI: Unlock the Revenue Potential of Your Tenant Base and highly recommend taking the 15 minutes to do the same.
As you can see from the five step cycle I went through above, the effort to make your current tenants happier with amenities and proptech can, and will, lead to new tenant leads down the road. It's much more cost effective to have this mindset. VTS, Harvard Business Review, and Bain all agree...
The time has come to prioritize tenant experience – not just because it's the word du jour in the world of commercial real estate. But because it can have a serious impact on revenue and overall property value.
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