Class A Office Owners Reimagine Space Utilization And Amenities Packages Amid Robust Competition
Owners Repurpose "Under-Utilized" Lobby Space to Create Dynamic Retail Experiences
15 Apr, 2015, 01:50 ET
HOUSTON, April 15, 2015 /PRNewswire/ -- As competition increases in major markets, owners of Class A office product have begun reimagining their buildings to determine the highest and best use of every square foot and create an amenity-rich environment to secure tenants, according to the second-quarter edition of "Ask the Expert," featuring Steve Purpura, Transwestern executive managing partner and Northeast market leader. In this edition, Purpura discusses some of the latest trends facing today's office owners.
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REPURPOSING LOBBY SPACE
Wide open lobbies are increasingly being considered under-utilized square footage. As many owners look for innovative ways to repurpose the space, creating a dynamic retail experience has grown in popularity. For example, this could mean decreasing the square footage of the lobby to increase the size of the coffee bar. Incorporating a diverse mix of retailers not only better serves building occupants, but it also engages the streetscape.
INCREASING BUILD-OUT COSTS
In some major markets, such as New York and Boston, a boom in construction is causing the cost of capital improvements and office build-outs to rise dramatically. Due to increasing demand, office build-outs cost 25 percent more than they did just five years ago. With more work than they can handle, subcontractors are getting aggressive on rates and accepting projects on their own terms, creating a constant battle for building owners.
PROACTIVELY FILLING VACANCIES
In tight markets, having a head start on an upcoming vacancy is invaluable. For example, if a 25,000-square-foot tenant looking to expand to 50,000 square feet tours a building leased by Transwestern, the leasing team can inform a tenant client in the market for 25,000 square feet of the upcoming vacancy.
ADDING ENHANCED AMENITIES
To remain competitive, Class A buildings must offer an upgraded amenities package. This could include fitness centers, conference centers, tenant lounges or bike storage rooms. Simultaneously, many owners are leasing space to retailers and service providers that add value for tenants, such as car washing, dry cleaning, shoe shines, shuttles and massage therapy. Coffee shops, fresh food vendors and sundry shops are also well-received by building occupants.
Download the full "Ask the Expert" publication at http://twurls.com/ate-purpura.
Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. As a member of the Transwestern family of companies, the firm capitalizes on market insights and operational expertise of independent affiliates specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 180 offices in 37 countries as part of a strategic alliance with Paris-based BNP Paribas Real Estate. For more information, please visit transwestern.com and follow us on Twitter: @Transwestern.
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