The Minneapolis-St. Paul commercial real estate market is really competitive right now, with a whopping 1.6 million square feet of new space under construction to meet the growing demand. But not just any space will do. In our work as Twin Cities commercial architects, we’ve found that tenants looking for new office and industrial workspace are focused on specific building amenities to help drive their leasing decisions.
At least part of the reason is because Minnesota businesses are having such a hard time attracting workers. According to the Minnesota Department of Employment, the Twin Cities’ first quarter 2018 employment rate of 2.9% is the lowest level since August 2000. As a result, employers have to become more creative and aggressive in securing talent. The right building features can help make a business more competitive, because they help employers attract and retain talented workers.
Building Amenities Make the Difference
In their Q1 2018 Office report, Cushman & Wakefield note that “vacancy is fluctuating on a property-by-property basis,” where assets of any class and use attract demand — if they have great amenities. “Properties that offer vibrant design, ample amenities, and character are able to attract increasing tenant and leasing activity.”
So which amenities are tenants most looking for, and how can building owners and property managers make them work for their buildings?
1. Fitness Centers
While the warm spring weather has most of focused on how to spend more time outside, that’s not always the case. During the long, cold Minnesota winter, an in-building fitness center or gym is a major benefit to health-conscious tenants. (And those of us who aspire to be more health-consicous.) Treadmills, free weights, weight machines, and stationery bikes tend to be the most popular equipment — along with somewhere to take post-workout showers, of course! Line at least one wall with mirrors so people can check on their form (especially important for weight lifters and yoga enthusiasts).
2. Café or Quick-Serve Restaurant
Starbucks and Caribou are busy at all times of day, and your office café can be, too — if it feels more like a trendy coffee shop than a school cafeteria. Provide tenants with a variety of functional spaces within the café to give them a reason to visit beyond simply grabbing coffee and food to-go. In addition to tables, provide arm chairs and couches, as well as high-top bars with outlets for laptops. If you want to make it a real restaurant, you’ll need a large walk-in cooler for fresh produce (and possibly a large freezer), as well as a vent hood and grill for hot food prep. Health department rules can get pretty stringent here, so you’ll need to do your homework.
3. Conference or Training Room
One of the most popular amenities you can offer your tenants is a shared conference or training room. This is especially valuable for your smaller tenants who don’t have the space on their own. A conference room will need to seat about twenty, while training rooms are typically large enough to hold fifty people. Training rooms need a variety of tables and chairs that can be rearranged to meet the needs of the training session. Conference rooms are normally more fixed. Both can benefit from white boards and a projector or large, laptop-accessible monitor. Smaller spaces can also be used for more informal break-out meetings.
4. Bike Storage & Showers
Minneapolis ranked #1 on Redfin’s 2018 list of most bike-friendly cities in the United States (and #2 on CNN’s 2017 list). Even in Minnesota winters, people like to bike to work for their health (see fitness centers above), to save money, and for environmental concerns. The amount of storage your building needs will vary, of course, depending on your location. For downtown properties, you’ll need more storage, while suburban workplaces won’t need nearly the density. You’ll want to find a spot where the bikes won’t get your lobby dirty and can be secured. As with a fitness center, showers are a must. Lockers also help.
5. Lobby Lounge and Patio
Of course your lobby itself can be a great amenity — if you design it right! Your goal is to create a space that tenants want to use on a regular basis. An inviting lobby can be used for taking phone calls, providing space for casual meetings, and a fun common work area. Give tenants and guests a break from the daily grind of work, by creating an open, relaxing space with a variety of seating options. This way, your lobby becomes an informal place for tenants to gather or just escape from their desk for a change of scenery.
No matter the business cycle, strong amenities can help commercial buildings command higher rents and more loyal tenants. In today’s ultra-competitive CRE market, the right amenities can make all the difference.
Do you manage a commercial building that needs some upgrades to get competitive? Contact us today to get started improving the return on your real estate assets.
Elizabeth Lari, CID
Elizabeth Lari is a Certified Interior Designer with more than 10 years of professional experience. Her practice is focused on tenant improvement and helping businesses create spaces that foster employee engagement and workplace culture. Elizabeth holds a BFA in Interior Design from Harrington College of Design in Chicago. She loves trying new restaurants, sports games, breweries, bike paths, and arts events with family and friends.