No commercial sector has been hit harder by the fallout from the COVID pandemic than office. The work-from-home movement that started during the pandemic continues today, with companies struggling to bring their employees back to their conference rooms and cubicles.
As a result, companies are rethinking their office needs, with several downsizing their square footage. That has left the office market in limbo and many office buildings with high vacancies.
What can office building owners do? One tool they can turn to today is hiring the best property management team for their buildings.
Property management teams can help building owners activate amenity spaces that can convince workers to return to the office. They can schedule regular social events that might encourage work-from-homers to make that commute at least three days a week. And they can provide building owners with the analytics showing how they can best light, heat and cool their buildings depending on occupancy trends.
Building owners can point to their property management teams as a key benefit when they are seeking new tenants to fill their office buildings. Companies can point to the perks that property managers provide as they attempt to bring their workers back to the office.
Having a top property management team in place, then, is a win-win.
We spoke with Hope Tate, executive vice president and regional operations manager with JLL, about how important property management services are to office building owners today. JLL covers the entire Midwest, including the state of Minnesota. Her perspective, then, is a valuable one for office building owners throughout the Midwest.
Having the right property management team in place has always been important for office building owners. But how critical is it today when the office sector faces so many challenges?
Hope Tate: Having the right property management team is essential for ownership when they are trying to maximize the value and appeal of their office space. Property management teams that have the skills and knowledge necessary to maximize the potential of an office property are key, especially today with the challenges that office owners face.
The right property management team can help increase the operating efficiencies of buildings to reduce the costs of owning them. Everyone is focused on that today with the economic struggles we are seeing and with the struggles of the office sector. Management teams that can help implement operational efficiencies that reduce costs, maximize rents and enhance the value of properties are in demand today. These teams can play a crucial role in helping owners attract tenants to their office properties and in helping owners maximize the value of their buildings.
We all hear the term “flight to quality” today when it comes to office properties. That is not just a buzzword. That is real. Companies are moving to higher-quality office spaces today. Property management teams that can highlight the unique features and advantages of properties and assets are a key tool for building owners. Property management teams that can showcase a property as an innovative workplace can help building owners recruit and retain tenants in this challenging environment.
Has having a top-quality property management team become a must-have amenity for office buildings?
Tate: It is a requirement. You need skilled individuals in place to activate the amenities of a building. You need a property management team that understands what works now when it comes to attracting tenants. It is no longer OK to say that we can do an ice cream social. People want more to convince them to return to the office. They want a reason to be engaged with their buildings. The status quo is no longer cutting it for tenants.
We have to work with owners to provide a space that is better than what employees are leaving behind at their home offices. We need to provide opportunities for workers to network. We have to provide engaging tenant events and amenity spaces in which workers can find comfort. There’s a focus on the cleanliness of buildings and shared amenity spaces today. It’s about the partnership between a skilled property management team and a firm that understands the importance and value of providing a better workspace.
Do property management teams meet with office owners today to talk about how to best use the public spaces in their buildings?
Tate: Yes. We offer an integrated platform of services that helps property owners manage their assets. We offer services that can assist them in activating their amenity spaces. We also work with them to help define and execute flexible leasing strategies.
It’s important for building owners to work with a team that helps them understand their space, lay out that space and make the best use of their collaborative areas. Employees want spaces where they can work together as a group or spaces where they don’t necessarily have to be at a desk. Property managers can help the owners of office buildings transform their public spaces into these collaborative areas.
I’m sure you’ve heard this term before, but we are moving toward a hotelization of office space, providing spaces where people can collaborate, spaces that are warm and inviting. Our property management teams can help owners identify ways of implementing those spaces within their properties. They help them find that flexible space that can be converted.
Are these collaborative areas and common spaces enticing workers to return to the office, at least on a part-time basis?
Tate: There are some office buildings that we manage that have adapted this idea of hotelization. For me, and for tenants I’m sure, I enjoy going to those spaces in a building. You want those spaces where you can spread out and be in a comfortable environment. Comfort is key today if you want to get employees back to the office. You must give them a reason to come in. You must make something that is better than what they are getting at home. Outdoor spaces are important, too. It all works together to help convince workers to come back to the office.
It’s not just physical space, either. It’s important to provide employees with opportunities to network. That involves scheduling and planning tenant events. Some of the properties that we manage have taken it to another level. They are planning a variety of events by working with our experience management teams. They might hold sushi classes. Others have cocktail hours where they teach employees how to make certain drinks. Some have herb gardens on the rooftops of their buildings. They are making floral arrangements with the tenants. It’s about things that are fun, exciting and different. It gives the employees more incentive to return to the office.
Offering a chance to socialize with their fellow workers is another way to bring employees back to the office, right?
Tate: It is really something to see the socialization efforts in action. Curating these experiences for tenants is key. They are not getting that in their home offices. They are not getting an opportunity to engage with other co-workers or others within the building in a fun, entertaining way.
Some of our buildings also host business networking events held by local trade organizations. BOMA Chicago, for instance, hosts a lot of industry events at office buildings in the city and suburbs. We’ve had diversity and inclusion celebrations at our buildings. There are always those opportunities.
It seems like much of the job of property managers today is to create and bring experiences to the office buildings that they manage.
Tate: That has always been part of the job. But it is heightened now, mostly because of the work-from-home movement. Building owners must figure out ways to bring tenants back. And tenants must figure out a way to bring workers back to the office. Amenity-rich spaces with a hospitality focus is key. It’s about activating those spaces. Food service is an example. Workers want access to not just food on-site, but healthy food. Providing these services is front and center now. Property management teams need to be proactive in understanding that and activating those amenity spaces. They must focus on going the extra mile when it comes to hospitality.
It’s no longer OK to say that tenants are booking a conference room. Now you have must make sure there is enough water for the room, that the organizers have the all the cables that they need, that the audio-visual equipment is up to the task. It’s like what you see in a hotel environment: Every need is addressed. That’s always been part of the job but is a focus today.
Are you seeing any positive trends in the office sector today? Are more people returning to the office, at least on a part-time basis?
Tate: We have made great strides during the last six or seven months. It depends on the day. Tuesdays, Wednesdays and Thursdays you see more activity in the office spaces. Fridays and Mondays tend to be a little slower. When I talk to clients, it sounds like their companies are close to 60% back to the office. If you think about where we were a year ago, that is an improvement.
Do the owners of office buildings recognize how important having the right property management team is?
Tate: They are very open to listening to our recommendations and ideas and implementing them. It is no longer a situation where these common-area amenities and events are nice to have. Clients and owners understand that they are now a requirement if they want to attract tenants to their buildings. We are seeing owners putting in basketball courts and golf simulators. They also understand how important it is to have turnkey spaces ready for new clients. When companies decide to move, they want a space that is ready and built-out. They don’t want to wait for a tenant build-out.
You mentioned outdoor spaces, too. How important are they for attracting tenants?
Tate: They are very important. People want to be able to step away from their desks and get some air. They want to be able to take calls outside or work on a report from outdoor spaces. Owners are focusing on activating their outdoor spaces, making sure there is appropriate seating in these outdoor areas. Some even include outdoor games like shuffleboard or bag toss. Some offer rooftop gardens where they grow herbs and vegetables. Both indoor and outdoor spaces are important today.
Property management teams are also relying on technology and analytics to better serve building owners, right?
Tate: Technology is so important today. It is much more important than it was even three or four years ago. We are using smart technology and data analytics and sharing that information with our clients. This helps our clients understand who is in the building and who is not. Have things changed from month to month? We use apps that can provide data analysis. We are focusing on automation tools that monitor and run buildings’ HVAC systems. We have technology platforms that help us engage with tenants. We can use our apps to share the fitness center with tenants, for instance, so that companies can schedule the use of that space. We can share with them when different areas of the building are activated with tenant events.
We can save money on lighting and heating and when working with vendor partners. We can help janitorial teams boost their efficiency when cleaning by telling them when portions of the building are usually occupied. They can adjust their staffing to focus on spaces that are seeing more traffic.