The rise of technology within the commercial real estate sector has been well documented on this blog and all over relevant publications. Just follow the money: funding in the real estate technology sector swelled to roughly $12.6 billion in 2017 – triple the $4.2 billion figure from 2016.
Much of this increase can attributed to the rise of tenant-facing technologies & companies (WeWork alone raised $4.4 billion last year!). Investors are watching as companies like Amazon & Airbnb are putting the customer first, winning on user experience, and taking their companies to the moon as a result (or is that just Jeff?).
All this funding tells us that investors believe that, just like in the transportation, hospitality, and retail sectors, user (tenant) experience can win big in commercial real estate.
However, with all this new technology and all these new companies emerging in the space, it can be very hard to keep track of all the different players and how exactly they’re moving the tenant experience needle. My own eBook on Technologies in CRE Office Space had 5 major sections and was over 10 pages long… and I was just cherry picking the big stuff.
It’s easy to get overwhelmed by all the facets of tenant experience: how you get to work, the strength of your wifi, the temperature at your desk, the feel of your office chair – it all matters!
It is critical, however, to see the forest from the trees, and the key to doing so in the commercial real estate tech world is by focusing less on the emerging technology but obsessing over the wants, needs, and day-to-day life of the tenant.
Painstakingly going through this exercise via in-person conversations, extensive research, and customer feedback has helped us here at HqO consolidate the many needs of tenants into our 3 Pillars of Tenant Experience.
Premium Physical Space
This one likely comes as no surprise – employees want to love the office space they’re in and the building they call home for 8+ hours a day. They want to be proud of their space and for it to adequately reflect the level of professionalism with which their company operates.
(There is an insane amount of research out there about how different office setups affect employees, but I’ll defer to T3 Advisors’ video series on why Space Matters to companies for anyone looking to dive in further.)
Location certainly plays a huge role here too – based on CBRE’s research, most millennials (who will make up 50% of the workforce in 2020) consider 30 minutes the longest commute they will tolerate, and getting to and from work is a huge part of the day.
There are also a few onsite amenities that appeal to a wide range of tenants. We conducted our own survey of over 300+ tenants this March, and 62% of tenants ranked health & fitness amenities as their #1 wish from their building. Providing an onsite gym can really move the needle for tenants.
Professional Community Management Services
Creating a sense of community and belonging at work is a critical piece of the tenant experience. Fast Company did research on the things people who love their jobs have in common, and #1 on their list was “they enjoy their coworkers”.
When you realize that employed persons between the ages of 25-54 spend an average of 8.7 hours at work a day, it makes sense that these work relationships have a powerful impact on employee happiness. The strength of workplace relationships actually have a profound affect on a business, as positive workplace friendships have been found to be critical for employee engagement and productivity.
Jessica Amortegui (positive leadership development consultant) has a great article on why friends matter at work:
“Workplaces that convert their employees’ untenable ties into the durable bonds shared by fast friends will have cultures and communities that are alive and generative—in one word, thriving. As denizens of these communities, we will be doing something even more powerful than bringing our lives and souls with us to work: We will be sharing them with friends.”
Building owners or operators who program community building events and opportunities for their tenants have an opportunity to significantly differentiate themselves from their competition.
Today, no one is better at this than WeWork, as they host social and professional events in their space weekly. These events allow their tenants to pick their head up from their computer screens and foster meaningful relationships with their coworkers.
This community focused approach is what allows them to boast that “70% of their 100K+ members have done business together”. Renting space in a WeWork isn’t just about a desk and coffee, it’s about joining a community, and this is something that can be replicated in almost any office building or office setting.
Elite Mobile Technology
Tenant facing technology is a critical piece of the tenant experience for many reasons, but perhaps the most important: communication.
We did our own research on the State of PropTech where we surveyed over 300 tenants from major U.S. markets, and we found that there is a major disconnect between tenants and landlords.
From our research, we discovered that 71% of tenants have no idea who their landlord is, and 92% either rarely or never interact with their landlords at all.
As a result of this disconnect, we found that 32% of tenants never find out about the amenities available to them at their office. On big campuses, where cafes and gyms could be scattered throughout the property, amenities and perks may be harder to find than they should be. The elevator flyers, posters on the walls, and email newsletters simply aren’t cutting it anymore.
You get it… if a tree falls… and one’s around… don’t make me say it.
Fortunately, just about every tenant carries a small device around in their hands that they check 150 times a day – that’s where they can be reached. We found that 74% of tenants were willing to download an app that would help them surface and navigate amenities in their offices and neighborhood.
At our launch this week at the Innovation & Design Building in Boston’s Seaport neighborhood, the thing we heard the most from tenants was this: “I know there is so much going on here but I don’t know about it and can’t keep up”.
These 3 pillars are the key to creating an exceptional tenant experience, and tenant experience is the key to attracting the best tenants. While each of these pillars can be powerful on their own, the combination of all these elements make each one even better. At HqO, you bring the space, we’ll bring the rest.