Amenities Have Evolved in Office and Industrial Spaces
The role of amenities has evolved since the pandemic—not only in the office sector, but in the ever-evolving industrial space as well. To provide an up-to-the-minute look at trends in amenitizing commercial spaces, NAIOP will devote an entire panel discussion to the subject at its CRE.Converge conference, scheduled for Oct. 18-20 in Seattle. In advance of that panel, Connect CRE spoke with two of the panelists—moderator Dawn Riegel, Principal with Ware Malcomb, and Jinger Tapia, VP Design at Ware Malcomb—for a preview. Here’s what they told us.
Q: Would you say that workplace amenities are now more important than they were prior to the pandemic?
Dawn Riegel: In the true office environment, the message I share with my clients is: you want to create a magnet versus a mandate. Meaning you want people to come back into the office and what you are offering them needs to be above and beyond what’s in the four walls of their house. It really is the social aspect for employees. The amenity spaces within office environments, and this does translate to industrial, are super important now more than ever. The hybrid work movement dictates that these amenity spaces be integrated into office spaces from day one.
Jinger Tapia: We discovered and determined that you can work from anywhere. I always use the analogy of singing. You can sing anywhere, but the best sound quality happens in an auditorium or a theater that’s geared for that sound attenuation. Like an auditorium, the office post-pandemic is about maximizing and creating the best work possible together, not just having people come to the office for heads-down work. Dawn mentioned this idea of social interaction. It’s not social from a fun standpoint, rather social from a human connection standpoint. That fosters growth and mentorship and a learning experience that’s less about being productive and more about future viability for the employee. So, the amenities are just as important today, if not more than pre-pandemic.
Riegel: I used to say interactive town halls, which is the new terminology for lunchrooms, were nice to have in office spaces and industrial spaces. Now they are a must. These new spaces create a place to gather, reinforce the company’s brand message, and connect employees to that message, whether it’s industrial or office. They’re areas programmed to have all the activities that connect everyone.
Q: Moving into the industrial side of the equation, the option of working remotely is not so much a factor with industrial facilities, but at the same time, they’ve gotten more sophisticated, and the employment requirements have also gotten more sophisticated. What role do the amenities play for industrial workplaces, especially in terms of employee retention?
Riegel: The industrial market has evolved, as we all know. There are different types of industrial, and from a manufacturing-type user standpoint, there are just as many employees – or even more – than in an office of the same size within the industrial building. That type of industrial would fall into an office amenity bucket. But when you’re looking at industrial from a warehouse standpoint where there are fewer employees, and the attraction and retention is critical, that environment focuses on wellness and connectivity to the exterior – the daylighting opportunity to eat lunch or take a break outside. For me as a designer, and working with developers, we suggest providing deeper landscape areas and certain sections of the building that could allow, if we’re doing a spec development, for future patios or outdoor break rooms that may be required by a tenant that comes into it. We’ve also even looked at how we can incorporate a walking path within the site or shared amenities within an industrial park.
Q: From the standpoint of pre- and post-pandemic, how are you as designers approaching your assignments differently?
Riegel: When you talk to clients, the key is to find out their “why.” Why do they want people to come back to the office? You mentioned it with industrial – it’s a need right there. They’re working in the warehouse, and they have to be in. They have support people there. They can’t be home. With office, it’s why do you want them to come back in, and then you address the spaces and offer expertise on all options within the design. I would say concierge hospitality is a common thread that comes throughout both sectors: industrial meets office – design matters.
Tapia: When you’re dealing with tenants or users, it helps to understand their business model, how their team works today and where they’re trying to get to with their future space or development. On the architecture side, if you don’t have a tenant in place right now, the design team’s goal is to build in the most flexibility possible. Going back to my original point, it’s fun versus improved work, coupled with health and wellness. Sustainable materials, access to quality air and quality daylighting, biophilia within the environment are all more important or more top of mind with our tenants and our clients as they come back to the office.
Q: Up to now, the discussion has really been from the standpoint of what you as designers bring to the situation. What kinds of concerns are your clients in both office and industrial bringing to you at this point?
Riegel: On the industrial side, engaging the 18-to-24-year-olds to work in that kind of facility is a common challenge our clients have. The competition is fierce to find them and to retain them. There’s also less land available for development so you have to go further out. Sites are more expensive; dollars and cents are hugely talked about, so we must creatively show the dollar value in the upcharge for it and the return on the investment. Between developers, clients and users, no one wants to spend any extra dollars. But we have data and research that shows the engagement for employees goes up when you make these small incremental design changes inside and outside of the building as talked about.
Tapia: As we’re master planning a spec development, we’re talking about the spaces between buildings as opportunities to extend internal programming. Does it have the flexibility to change over time or pivot with market or tenant demand? Often, we design a framework of spaces that meet market expectations but allow for some user customization. You can create the space, but if you don’t have the right programing or the right corporate culture that goes into it, it’s not going to get used. Some attitudes toward amenities are to check a box, meaning tenants may not consider a property unless it has certain amenities. For a long time, we put in bocce ball courts, but do people actually use those? Now the conversation starts with what was the intent of the bocce ball court? If it was a respite from work, how do we do that differently as we move forward without taking up a large amount of space? Could you do the same thing with a piece of furniture, like a foosball table that can move and allow user flexibility?
Riegel: Something else I’ve heard about is the solvency of the owners because of the defaults going on in industrial and office as well as the availability of capital. These are buildings clients are going to come in and invest in, in both office space and/or industrial; are these landlords in it to win it and they’ve got the financial capital, or are they going to be turning this back over to a bank? I’ve heard from brokers that in the past, this would not even be on the table for consideration but now that’s one of the first things they review. I think that’s top of mind to brokers as well to their clients, end users and tenants.
Tapia: On the industrial side, I’m seeing a trend that is not an amenity in terms of a certain type of space. Some of our national industrial clients are looking at how to create a unified brand image that speaks to the quality of the development. As tenants move from one property to another, they know that it belongs to developer X or developer Y. There’s consistency which then instills confidence and a certain level of quality that’ll attract tenants and employees. That could include signage and branding and naming conventions, upgraded site furnishings and fixtures.
Riegel: We see all types of clients, both for office and industrial, national as well as local and regional. They all want to provide great spaces for their employees and balance it with the bottom line. No one wants to spend an arm and a leg to get a great space. You want to be able to have solid ideas of how to improve the space that are flexible, provide long-term real estate value and allow them to continue doing the work that they do. These are the kinds of things that Jinger and I and our teams and across country reconcile with clients on a day-to-day basis.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).