Offices are only as valuable as the companies that work in them. The more profitable the tenant, the more they are willing to pay for the space. The most profitable companies are innovative ones. They can leverage the value of their fresh, proprietary products into high margins and benefit from staggering valuations. But, these companies also expect a lot more out of a space because they too are competing. The human capital that makes up an organization is the most finite and valuable thing they possess. In order to stay on the bleeding edge, companies have to employ the most talented and dedicated specialists. These people are in high demand, so they can be choosy with their career options. Increasingly, offering more money is not the answer.
This study by MetLife gives some great insight into the changing nature of employment. It seems the ‘leave work at the office’ mentality is being replaced by a holistic look at work-life balance. Employees want their work to be a health benefit, both physically and mentally. They do not tolerate unhealthy work cultures and want to be passionate about the work they do. If health and wellness benefits are offered employees are 61% more likely to accept a job with a new employer and 59% more loyal to their current one. Due to the gig economy employees are not as afraid to switch employers or even careers. 66% of the respondents in the survey were looking to be at their same job in the 12 months.
In order to extract the most value, the commercial real estate community has to add the most value. The more services an office space can provide, the more chances it has at generating profit. This has started a shift in what it means to be a facility or property manager. Now, they have to come up with impactful programs and coordinate their execution.
This year NYC’s Tishman Speyer announced a revolutionary offering for its office tenants. Through a series of partnerships they plan to give a wellness package that provides backup child care, on-site health screenings, travel planning, community volunteer engagement, personal grooming, rideshares, human resources and catering services. The beauty of this idea is that now, Tishman is not competing on the value of its space alone, but on the value of its leasing package. They will be able to attract top companies – because they can help attract top talent – and diversity themselves from other similar spaces.
Since traditionally, facility and property managers have been mainly focused on the buildings themselves, many lack the skills necessary to perform these new roles. Not to worry. There has been a great number of companies that offer almost every imaginable amenity service. Managed by Q offers everything from cleaning, maintenance and IT help to relocation and staffing needs. The Red Door offers on-demand salon and spa services to offices all over the country. TransitScreen offers real-time displays with local transportation options.
“If you’re creating a premium employee experience, it means that you are attracting and retaining the best talent and you’re creating an environment where people are most productive, collaborative and creative,” says Managed by Q VP Allison Whalen. “But that can create a dilemma for facilities managers because obviously the more you bring into the space, the more expensive it can be… You can still say yes to innovation and office amenities and achieve great cost savings along the way, but how you do that is through the use of technology.”
This is a monumental shift as far as I see it. Buildings are starting to become a large piece of the value chain for tenants. That means that they can extract more value themselves. It also means quite a bit more expertise is needed in the management of these office spaces. But, sometimes the best manager knows when to do things themselves and when to delegate to trusted partners. I tend to choose the later.