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February 20, 2020

(Photo credit: Bloomberg/Contributor/Getty Images News)

Long gone are the days when offices with cubicles were the norm. Over the past decade, offices have been flooded with amenities like free snacks, yoga at lunch and hip areas to hangout.

But expectations have moved on further. Employees are now looking for perks that go beyond fringe benefits, and landlords are incorporating amenities that are available to all tenants, not just coworking members. Event spaces, tenant lounges and services borrowed from high-end hotels are becoming commonplace.

“Attractive amenities are no longer solely the territory of coworking operators or big tech companies,” says Ben Munn, Managing Director, Flex Space, JLL. “A lot of landlords are now offering these perks for the whole building, including managing coworking and/or flexible spaces that all tenants have access to.”

Since 2010, the flexible space sector — which includes coworking spaces, short-term leases, offices that offer mobility within the workplace, and virtual workplaces — has grown at an average annual rate of 22 percent, according to JLL Research.

Although that pace of expansion may slow in the years ahead, given the disruption seen in the second half of 2019, tenant expectations have been reset in a way that has fundamentally changed the way space is delivered and consumed, says Munn.

Here are seven amenities with staying power.

Event spaces

Ever imagined getting married in an office building?

The Old Post Office – a massive redevelopment project in Chicago – is now an office building with a historic lobby that can host weddings, galas and cocktail receptions. It is only one of 11 event spaces onsite that can accommodate groups as large as 2,000 or as small as 30.

Renovated Old Post Office lobby, Raymond Boyd/Contributor/ Michael Ochs Archives

More landlords are taking this route. Event spaces open up new revenue streams from soirées that might have otherwise been held at a conference center or hotel, says Tom Larance, Head of Experience, JLL.

“An auditorium or a reception hall can help differentiate a landlord’s property and provide additional value to the tenants,” he says.

Landlords are also curating events in these spaces that are appealing to the tenant base they have and seek. It’s a cue taken from coworking companies that created community by inviting a larger public to event spaces with thoughtful programming.

The Wing, for example, a female-focused coworking company, has brought in speakers that include Cynthia Nixon and Christiane Amanpour. It also hosts feminism-inspired movie nights and features influential thinkers in the wellness space who lead sessions about self-care.

“Event space allows landlords to bring in programming that excites tenants and the community, but it also serves practical value for companies that have all-hands meetings, where workers from the company’s other offices come together for a big presentation,” says Larance.

Tenant lounges

Coworking offices are almost synonymous with lounge space: the couches, hangout nooks and coffee bars where workers can choose to work on laptops, hold meetings or simply leave their desks for a change of scenery.

Many companies wish to create that level of flexibility in their own offices but don’t have room for it. Instead, landlords are stepping in and creating tenant lounges.

The Aon Center in Chicago, for example, has a 34,000-square-foot amenity floor, dubbed Cloud Level, on the building’s 70th floor, which overlooks Millennium Park. The space includes Remedy, a WiFi-enabled tenant lounge with a coffee bar.

In Minneapolis, building owner Accesso built the IDS Tower Club’s lounge on the 41st floor of the city’s tallest building, which already includes concierge services and fitness facilities.

As workdays get longer, it becomes more important that buildings have places for employees to have fun, too, says Larance. Some tenant lounges also include spaces where employees can blow off steam.

The owner of 1735 Market Street in Philadelphia, for example, installed a 20,000-square-foot amenity floor that features a tabletop shuffleboard game, gas fireplaces and wine lockers. And the owner of 2001 M Street Northwest in Washington added a VR golf simulator with a convincing version of a putting green.

On-demand food

Tenant lounges can also be a gateway to another revenue stream: on-demand food.

At the tenant lounge in theMART in Chicago, a property owned and managed by Vornado Realty Trust, there are buzzers at the tables that summon a waiter to take food and drink orders.

“This restaurant and tenant lounge hybrid makes it so that, if someone just wants to be there to use it as a lounge and not feel pressured to order something they don’t have to, but if they want food, it’s at their fingertips,” Larance says.

Landlords are also including on-demand food outside of tenant lounges. C3 at Culver Pointe, a development in Los Angeles County, offers gourmet food trucks and terraced pavilion seating. There are also outdoor barbeque pits which tenants can light using their car keys and buy high-quality meat from an on-site vendor.

These offerings are becoming more important as less workers bring a brown bag lunch.

In 2019, Americans spent US$863 billion eating out, up from US$590 billion in 2010, according to statistics from the National Restaurant Association. It’s officially surpassed the amount they spend on groceries, and makes convenient food options a must-have for offices, Larance says.

Coworking spaces

Many landlords have entered the coworking game themselves. Some monetize the space as an additional revenue stream. Crown Estate launched its first flexible working space at One Heddon Street in London’s West End last year with a variety of membership options, and an events space that hosts yoga classes and seminars.

But many provide it for the same reason they provide lounge space: to attract and retain tenants and meet their demands for flexibility in how they work, Munn says.

“Instead of signing leases with coworking operators, some landlords are developing or partnering to create their own coworking solutions,” he says.

“This is all about providing great customer experience — and owning that experience.”

Hospitality-esque services

Landlords are also incorporating elements of hospitality that make the office feel more like a chic hotel.

Apps can assist with this process, Larance says, allowing tenants a wide variety of services from ordering food to booking sound baths (held in the event space, of course).

At Playa District LA in Los Angeles, a sprawling 1.3 million square foot office campus, workers can call upon an on-site concierge to help with restaurant reservations, take care of a catering order, or book a haircut.

In San Francisco, workers at One Bush Street, owned by Tishman Speyer, can book a massage in the lobby or enroll the concierge to find a babysitter and plan a weekend getaway.

A flexible menu of programming supported by concierge staff—for example, happy hour barre classes every Tuesday evening for two months—allows landlords to change offerings to meet tenant needs as they receive feedback.

Wellness offerings

An increased focus on wellness certainly wasn’t solely created by the flexible space boom, but operators adoption of it put wellness at the workplace in the front and center.

Landlords see that wellness is top-of-mind for employees, and have altered their amenities accordingly, Larance says.

“At the Old Post Office, the fitness center has a boxing ring, so there will be curated training classes and programming around this,” Larance says. “The building’s Telegram lounge also has a bocce ball court.”

Click to find out why investors are racing to rethink flexible space.

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Ben Munn

global head of flexible space at JLL

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