When building out tenant improvement projects in an office building, we tend to see competing interests between the building owner and the tenant. Building owners are naturally concerned about the long-term value of the building. In contrast, tenants are concerned about how the space will work for their business. As a designer, my job is to balance the needs of all parties and help close the deal. I’m trying to design the physical space to move the deal forward and help owners and tenants thrive.
Building Owners: Taking the Long View
They say a building owner has a thirty-year perspective, while a tenant has a three-year perspective. That may be a bit of hyperbole, but it gets to an important point. Asset managers are concerned about the long-term viability and growth of their real estate investment. A lot of things contribute to the value of the property, including long-term leases, responsive management, quality construction — and good design.
Landlords want to be cautious about how the design of an individual suite works with the rest of the building. It may serve a tenant today, but if it’s dramatically different than the surroundings, it may not work for the next tenant. If a deal is a full floor or half a building, that’s less of an issue. But if it’s a 5,000 square foot office, the design should match the look of the building.
This concept is critical for property managers, building owners, and asset managers. For example: a savvy building operator will want all the doors and hardware in the building to be the same. That will help create a consistent, harmonious look throughout the building, thus increasing its value.
From a more technical perspective, we’re also very careful with demising walls, which separate one tenant from another. You don’t want to end up with infrastructure — such as plumbing, cabling, or a server room — on a demising wall. Instead, you want to put infrastructure on a wall that’s less likely to be moved. That’s because when a demising wall eventually has to be moved, you don’t want something costly in the way. For owners, the less they have to spend on construction, the easier it is to do the deal and the greater the building value.
Tenants: Creating a Space that Shines
Tenants, of course, have a wholly different perspective. This is the space that they and their employees will be using every day. You have to make it purposeful and pleasant for them. If the space design only accounts for the building owner’s needs, the tenant won’t sign the deal.
In addition to aesthetics, tenants also care about other elements of the programming. They want to get the square footage right, of course, but also how that space will be used. The smart ones also care about the adjacencies — who sits next to each other and how that space flows.
All of these items are critical to recruitment and retention efforts. In today’s competitive work environment, workspace design is becoming increasingly important. According to Glassdoor, 76 percent of hiring decision-makers say attracting quality candidates is their primary challenge. For these employers, a well-designed space is essential to attracting the workforce they need.
Our job is to guide tenants to better understand who they really are. What do they want in a space, and how can it help them achieve their broader business goals? By getting at the core of the business — not just their space needs, but their brand promise — we can design a space where they can truly thrive.
Striking a Balance
Ultimately, it’s always a delicate balance between the owner’s needs and the tenant’s needs. Where that balance falls is going to be different from case to case. When you get this balance right, it’s a win-win for all parties.
Here’s a good example: We’re working right now with an office that’s nearing the end of a six-year lease. We did the initial design when the tenant moved in, and now we’re working on how to refresh the space to meet the tenant’s changing needs. Our work is a negotiation between the owner and the tenant to help guide them through these changes in their space. The refresh will help keep them in the building — while keeping the owner’s interests in mind.
|Weld Ransom, CID