SEE MORE ON THIS TOPIC<\/a><\/p>\n \u201cThe office owner traditionally had one product\u2014the termed lease\u2014that was commonly for 10 years. Tenants sought efficiency in its corporate statement, so service was never a focus,\u201d<\/em> observed Equity Office President & CEO Lisa Picard.<\/em> As technological innovations continue to shorten business cycles, and the meaning of work-life balance changes drastically, the flex office product, popularized by WeWork, \u201cis satisfying the market with an office product, granting work space that is flexible and has a dose of fun.\u201c<\/em> Picard added, \u201cThe office worker needs something more than just some place to show up at 8 a.m. and leave at 5 p.m.\u201d<\/em><\/p>\n Convene partnered with The Durst Org. in 2017 to provide 55,000 square feet of amenity space for tenants of One World Trade Center in Manhattan, including a micro-brew coffee shop, grab-and-go cafe, work lounges, flexible meeting space, game rooms, as well as community and wellness programming.<\/p><\/div>\n Shifting attitudes toward work have driven the popularity of these lifestyle components. By creating environments that reduce the contrast between home and work, organizations can attract the most passionate employees to an environment where people want to do their best work. Picard commented that engaging amenities and services can keep employees in the building longer, providing the dual benefit of slow-releasing commuting traffic during peak hours and giving those working longer hours a place to take a break.<\/p>\n Google and Apple largely initiated the concept of creating offices with hotel-like amenities and services<\/a> as ammunition in the war for talent, noted Bernice Boucher, managing director of JLL\u2019s consulting group & senior leader of the firm\u2019s workplace strategy practice. Now, office owners themselves are following suit.<\/p>\n Today, office assets built in the 1970s and 1980s are being repositioned to feel \u201cless corporate,\u201d Picard noted. More owners are trading grand, marble-floor lobbies for more inviting entries that offer grab-and-go cafes and coffee bars. They\u2019re also incorporating in-demand amenities like outdoor areas and rooftop decks, as well as more sophisticated fitness centers and conference centers.<\/p>\n One World Commons Game Room, Managed by Convene<\/p><\/div>\n \u201cIf you have a commodity asset that feels corporate, it\u2019s almost like the kiss of death,\u201d <\/em>Picard observed. \u201cIt says to the people of the organization that they\u2019re less cared for.\u201d<\/em><\/p>\n Low unemployment and a shortage of skilled labor<\/a> have intensified competition for top talent, so providing high-quality amenities and services is a necessity. \u201cIf (office owners) don\u2019t have these amenities and services, they\u2019re really not as relevant,\u201d<\/em> Boucher asserted. \u201cTenants look at different buildings, and as soon as one building starts to offer these options, then everyone else needs to follow.\u201d<\/em><\/p>\n And while some owners may be concerned about the cost of investing in hotel-like amenities and services, the returns make the investment worthwhile, she added. By her estimate, more innovative and new features often allow owners to push rents up about 15 percent. Elevated offerings can also attract a high-quality tenant to lease space, frequently leading to accelerated lease-up and rent increases of 10 to 20 percent on subsequent deals, she added.<\/p>\n \u201c(Owners) need to think about what they can do to attract a tenant that\u2019s going to make a splash and validate that space. <\/em>\u2026 It can be a magnet for other tenants,\u201d<\/em> she said.<\/p>\n This strategy has been successful for Equity Office, which is in the midst of a $500 million redevelopment<\/a> of Willis Tower, the 110-story Chicago landmark formerly known as Sears Tower. Highlights include 300,000 square feet of experiential retail and entertainment space and 150,000 square feet of tenant-exclusive amenity space.<\/p>\n Park Avenue Tower<\/p><\/div>\n While the renovation isn\u2019t scheduled for completion until 2019, the firm has already inked more than 1 million square feet in leases over the past year. Just a few weeks after Equity Office unveiled renovation plans in February 2017, the tower landed the Chicago operations of the National Restaurant Association<\/a> for a full-floor lease. Other big names have signed on, including Morgan Stanley, which will occupy 125,000 square feet on four floors.<\/p>\n But implementing hospitality-like amenities and services is not just about attracting tenants; it\u2019s also about retaining them, especially in today\u2019s market, where office leases are getting shorter and traditional owners are facing competition from co-working providers.<\/p>\n Some owners that are hesitant about deploying the capital needed to build out or operate amenity space are turning to third-party services. \u201cWe create a hybrid between a managed offering and a leased service that sways between tenant-exclusive and open to the public,\u201d<\/em> explained Convene President & Co-Founder Chris Kelly. His company partners with owners to bring in hotel-like amenities and services and manage them on the owner\u2019s behalf. In exchange, owners often permit Convene to rent out their meeting and event space to outside customers.<\/p>\n Park Avenue Tower<\/p><\/div>\n The most common hospitality-inspired amenities that Convene\u2019s clients request include flexible meeting and lounge spaces, fitness centers with programming, pantry services and catering, as well as coffee shops and grab-and-go restaurants. Many Convene owners have bought into the company\u2019s business model by rolling out Convene\u2019s services across their portfolios, according to Kelly.<\/p>\n Just as customers develop an allegiance to a hotel brand because of its services and offerings, tenants can form loyalty to office owners\u2014and they often will pay a premium for a workplace that offers this unique and tangible value, Kelly explained.<\/p>\n According to Kelly, this value trickles down to the talent hunt, particularly as more firms define themselves as technology companies and compete for the same employees as Silicon Valley titans. He recalled speaking to a major financial services company that said it lost more candidates to Google than to any other company, despite offering higher salaries.<\/p>\n This is because \u201cthe definition of compensation is changing,\u201d<\/em> Kelly explained. \u201cQuality of life at work is a meaningful element of compensation that is changing people\u2019s decision about where they want to work. \u2026 People are working all the time now, and the counterbalance for that 24\/7 live-work integration is that people expect their quality of life at work to be addressed.\u201d<\/em><\/p>\n Picard agreed that traditional owners are realizing the benefits of investing in amenities and services because \u201creplacing a worker or finding talent is far more expensive than paying a premium in real estate.\u201d<\/em> And if the amenities are proven to help those organizations attract and retain talent, then owners are willing to pay premiums, Picard added.<\/p>\n As more owners get on board, advancements in technology will allow them to expand their offerings even further. JLL has seen a desire among owners and tenants for their buildings to be \u201creally activated with the Internet of Things,\u201d<\/em> Boucher said. Several of JLL\u2019s clients use an app that shows where building amenities are located, allows users to order coffee or lunch, makes reservations for specific spaces and more.<\/p>\n![\"\"](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/05\/One-World-Commons-Cafe-five-b.jpg\")
<\/a>Arms Race<\/h2>\n
![\"One](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/05\/One-World-Commons-Game-Room-two-b.jpg\")
<\/a>![\"\"](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/05\/Park-Avenue-Tower_CClub-06A-b.jpg\")
<\/a>Quality, Not Quantity<\/h2>\n
![\"Park](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/05\/Park-Avenue-Tower_CClub-08-b.jpg\")
<\/a>
![\"\"](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/05\/Von-Karman-Creative-Campus-Bldg-4-Spec-Suite-b.jpg\")
<\/a>