MANAGER’SLOG
What Tenants Want
By Dan Pufunt
President, National
Property Management
Jones Lang LaSalle
Satisfying tenants is critical to succeeding in commercial real estate, especially in today’s competitive market with so much office building selection to choose from. Just as the market has shifted, so have tenant
demands, necessitating that commercial properties reflect what tenants
want—superior service, operational efficiency, sustainable initiatives, technology and workplace flexibility.
With continued economic uncertainty, tenants continue to look for value,
whether it’s in the form of buildings ripe with amenities like fitness centers, valet
parking and on-site eating facilities, or low-cost, efficient space, housed in a well-operated building in a desirable location. As a result, owners are either updating
their buildings to accommodate popular perks or looking to property managers to
improve operations and reduce costs so savings can be passed along to tenants.
Sustainability initiatives—a top priority for tenants, today—are also considered
value propositions. Tenants have become increasingly knowledgeable about
green technologies and their ability to drive down operating costs, pressuring
owners to retrofit buildings to improve their efficiency.
Owners have responded, and many of them are investing resources and time
to achieve LEED certification. In March, the number of LEED-certified assets
reached 12,000. Owners have also focused on standalone green initiatives like
energy-efficient lighting and powering buildings with alternative energy sources.
For instance, LED lighting is projected to capture 52% of the commercial market by 2021, according to the report Energy Efficient Lighting for Commercial
Markets from Pike Research. US solar energy installations soared by 109%
between 2010 and 2011, according to US Solar Market Insight 2011 Year-in-Review from the Solar Energy Industries Association.
But tenants want more than just green technology. Nearly 90% of companies
plan to increase their productivity-enabling technologies, such as voice-activa-tion and sophisticated video conferencing, by 2015, according to the Workplace
of the Future survey released in November 2011. In response, owners are ensuring their buildings can facilitate such technology.
In particular, buildings must be digital-ready. According to the survey, 88% of
companies already offer their workforce personal devices like smart phones,
PDAs and tablets; 62% are using desktop video conferencing; and cloud computing is on the brink of transforming the way we do business, with 46% already
using the Web-based technology.
Adoption of these technologies is not only influencing commercial buildings’
technical capabilities but also how space is configured. The Workplace survey
highlighted ways tenants are changing their space needs: moving to open, collaborative workspaces with fewer individual offices (77%) ; increasing individual
workspace density within the corporate office (62%); reducing square footage
through disposition (54%); allowing employees to work remotely from home,
satellite sites or client sites (46%); and fostering mobile working programs like
desk-sharing, hoteling and co-working spaces (31%).
Overall, today’s tenant demands are spurring sound investment in office buildings, making them more efficient, sustainable, technically savvy and flexible. As
a result, owners, tenants and the environment will ultimately benefit.
Better Buildings editorial advisor Dan Pufunt is president of national property management for Jones Lang LaSalle in Chicago. He may be contacted at
dan.pufunt@am.jll.com. Views expressed are the author’s own.
