News & Press
An Amenities Race is Heating Up in the Office
Anchin’s Rob Gilman spoke with GlobeSt.com about the valuable amenities that office landlords are adding to help entice tenants to return to in-office work.
“Some of the newer buildings have incredible amenity spaces. There is going to be big competition among landlords to compete in the marketplace. These amenity spaces are going to be the thing that people are going to look for,” Rob Gilman, co-head of the real estate group at Anchin, tells GlobeSt.com.
While amenities have continued to get bigger and more impressive, Gilman says that the most valuable amenities today are those that replace square footage in the office. These include conference rooms, training facilities, collaboration spaces and event spaces. Companies can leverage these communal spaces while downsizing their office footprint, a win-win in the post-pandemic world where employees are not in the office daily. “A lot of companies require a significant amount of conference room and training facilities space. Companies are looking to lease space in buildings that have this availability as part of the building amenities,” says Gilman.
This is an important distinction in the current office leasing trends. Companies are reducing office footprints—some by 20% to 50%—but they are also upgrading to a better quality space. “There are a lot of companies that are downsizing, but downsizing into a space with better amenities. In those cases, tenants are willing to take less space, but pay more per square foot for access to those amenities,” explains Gilman.
While leasing activity continues to trail well behind pre-pandemic activity, companies are being strategic in securing high quality spaces that will encourage a re-integration into the office. Luring employees back to the office is the primary benefit of these amenities. “In a lot of industries, getting quality employees is difficult,” says Gilman. “If you can provide amenities, it is a big selling point, and I think it is going to be an added value when people are looking for space.”
Landlords are responding aggressively by upgrading older buildings to compete. Some landlords have removed existing office suites to make way for shared spaces. “In those spaces, they have to charge more per square foot because there is less leasable space,” says Gilman. But, if it is an attraction for them, it is well worth it to be spending money.”
Read the full article from GlobeSt.com