In the ever-competitive office sector, landlords and developers are turning to new tech advances, luxury amenities and hotel-quality service levels to compete for tenants, according to industry leaders at the National Association of Real Estate Editors Spring Conference in Las Vegas.
"There is an amenities arms race now, but it varies by region," CBRE Global Investors Robert Perry said. "People want something that is authentic to the local market. You almost have to curate it in a way -- then it becomes a service offering that's almost hospitality-like."
As workspaces shrink, landlords now are focusing more on upgrading common spaces, such as conference rooms, roof terraces, fitness centers, cafes and more welcoming lobbies. Those spaces are no longer afterthoughts, but given higher priority during the pre-construction planning and design.
"Lobbies are really opening up," Michael Anderson of Colvill Office Properties said. "The retail spaces are not behind granite walls anymore. They're spilling out into lobbies like you might see in a hotel. The idea is to bring more activity into the lobby."
Developers are also rethinking how to balance security needs with the new design aesthetic. Perry said employers no longer want a security desk in prominent locations at the main entrance.
That's where technology comes in play. His clients have started offering dedicated smart phone apps that allow tenants to send access codes to visitors so they can enter secure spaces without having to interact with security guards.
"We're piloting a project now where we set up a geo-fence around the office, so when you get within three miles of your workplace it will send a text to the barrista in the lobby to make your latte so it's ready when you walk in the door," Perry said. "It goes back to the level of service."
Co-working space providers are highly sought after in the Class A office sector.
Natalie Snyer Bode, an office-tenant relations specialist with Cushman & Wakefield's Dallas office, said Fortune 500 companies are subletting swaths of co-working spaces, either as satellite offices or for more strategic reasons.
"The blue-chip tech companies, the reason they are taking down these large co-working spaces is also to recruit talent that's in those spaces already," she said. "They're also looking at whether there are any tech start-ups they want to acquire."
Other large office developers and landlords are now getting into the business because it provides flexibility to tenants that are looking for turn-key space.
"Hines is looking to launch their own branded co-working concept or partner with one of the established providers," Anderson said.
Another way to provide tenant flexibility and immediate occupancy is to build spec suites.
"There's a landlord in Dallas now that all of their buildings are built as spec suites," Bode said. "They have finished break rooms, they're already wired and cabled for IT. They offer a five-year lease with no negotiation. They cut out all the mumbo jumbo so it almost looks like an apartment lease."