Vacancies hurt. They cut into operating costs to maintain. Meanwhile, you're spending on market listings to attract prospective tenants – all without a lease revenue stream. According to JLL Research's U.S. Office Outlook, total vacancy increased for the third consecutive quarter in almost all asset classes.
To save money, cost-conscious tenants are are looking toward older buildings that have been remodeled with tenant improvements in mind. It’s no wonder, then, that renovations to older buildings are on the rise. New generations of tenants prefer modern workspaces with minimal costs, with an emphasis on sustainability and cutting edge technology.
1. Creative spaces
Out are the Dilbert days of harsh rows of cubicles. In are open-tables, flex desks, couches and treadmills. Individual workspaces are shrinking and giving way to collaborative spaces and meeting rooms. Our own office has ‘pods’ instead of cubicles and a variety of themed conference rooms.
Giving employees the option of moving around & find a space that best suits them can boost creativity and productivity. If your building is full of maze-like walls, consider knocking some out to create open spaces which tenants can customize to their liking.
2. Refresh the externals
A fresh coat of paint is an easy upgrade that can do wonders. Neutrals are always a good choice, as it makes it easier for prospective tenants to envision their own brand and identity filling the space. Touches like landscaping and indoor plants can also rejuvenate a space for low costs.
3. Engage in sustainability efforts
Tenants – especially younger tenants – prefer sustainable buildings. Consider offering site-wide recycling or composting services to improve tenant engagement. Relamping – i.e., replacing existing lights with energy efficient bulbs – is a quick upgrade that can save money. Windows are another feature that can benefit from energy-efficient upgrades. How old is the HVAC system in your building? Out-of-date heating and air conditioning systems can be huge energy wasters.
If a replacement is off the table, even older HVAC models can be retrofitted with updated technology to provide features like occupancy-tracking, proactive automation, and energy performance data. Upgrades like these can provide transparency and control to tenants, helping them lower their own energy costs.
How easy is it to get to the office? Do tenants have to circle for a spot, or is ample parking available? Beyond parking, newer generations of tenants are likelier than ever to use public transportation or even cycle to work. Consider adding dedicated bike racks. Amenities like lockers and showers are also attractive to employees who cycle to work or jog during lunch.
5. Get smart
Employees increasingly seek workplace environments that cater to them. Deloitte’s “The Edge” in Amsterdam, hailed as one of the most connected and greenest buildings, attracts and serves employees with mobile apps to guide to the best parking spots and building areas to support their working style, requirements and preferences. Maybe The Edge is out of reach – but you can empower occupants with the ability to control temperatures and lighting in their own zones. Advanced BAS solutions can capture occupant feedback and deliver employee controls, environments and experiences that significantly affect comfort, productivity, health and overall satisfaction.
6. Increase security
Whether your building is in the middle of a bustling city or on the outskirts of town, it’s important that tenants feel safe. Brightly lit areas are important for employees working off-peak hours. You could consider timed or automatic lights in the parking lot. Visitor registration, key-card access, cameras, and alarm systems are all options that increase property value.
Improvements that help your tenants, in turn can help you. In addition to the energy savings and sustainability benefits, a modernized, connected building can yield higher rates per square foot. Modernized buildings help attract and retain tenants. This helps to reduce vacancy and increase lease revenue. And, it can help you boost your lease cost per square foot. Together, these factors can start adding value to your property assets.