Transwestern report: What quantifies cool in real estate & how much do tenants actually care
Transwestern asked its top tenant advisors from across the country, the vast majority of which have been in the business for more than 15 years, for their opinions regarding what clients really want when they ask for “cool space.”
For most tenants, physical space first and foremost must prove functional, practical, and cost-effective; the cool factor is icing on the cake.
The responses of 45 survey participants to some of the questions addressing internal and external cool factors are included here, providing some insight into what occupiers of real estate may desire and how important these elements are when it’s time to sign a lease.
“* Although a lot of attention is paid to up-and-coming submarkets in metros around the country, two-thirds of survey respondents felt that the property itself, rather than the submarket in which it is located, has the most impact on ‘the cool factor.’ However, in certain markets, such as Boston and Chicago, submarkets play a larger role and a cool building ‘in the middle of nowhere’ will not achieve the desired impact.
* Only 32 percent of the advisers surveyed indicated that ‘outside the box’ factors, such as a location’s accessibility to public transportation, good schools, and walkability to shopping and dining, were more important than factors “inside the box.” In other words, in-building conveniences such as an on-site cafeteria and a security desk still rank higher on tenants’ desired amenities lists than those offered by the immediate neighborhood, although this mindset is quickly shifting due to the attitudes and preferences of the younger generation.
* When asked if the open office concept is a fad, 59% of the advisers answered ‘yes,’ with the majority indicating that their tenants are opting for a mix of private offices and open spaces to accommodate different work styles and functions. This trend is likely to continue, as space planners have become more sophisticated in how they address noise and visual distractions in an open office environment.
However, “two-thirds of the respondents reported that communal space for relaxing and socializing – whether a breakfast bar, lounge area with sofas, or game room –is essential for attracting and retaining high-quality talent.”
* Sustainability initiatives are oftentimes cited as a way to increase the desirability of a property. Yet nearly two-thirds of respondents reported that if all other factors are equal, clients are not willing to pay a premium for space in a LEED-qualified building.
* … 60 percent of respondents believe that a company’s real estate is equally important to or more important than marketing and advertising when it comes to communicating a company’s brand. In fact, some advisers would go so far as to argue that real estate decisions have become part of a company’s overall marketing program.”