A recent report from Cushman & Wakefield revealed that Manhattan office leasing activity soared to the highest level in four years last quarter. Reflective of the buoyancy of the local employment market, the stats indicate it’s a good time to own office space in New York City. Dig a little deeper however, and it’s clear those numbers only tell half the story, as total available space also reached the highest quarterly level in four years too. Demand is high, but so is supply.
Manhattan’s landlords find themselves in a battle for tenants and for those that want to get ahead, understanding the new leasing landscape has never been more important…
The war for talent
Large tech companies have added amenities like sleep pods and rock climbing walls to their workplaces, raising the bar when it comes to employee perks. Traditional companies have had to follow suit in order to attract and retain the very best talent.
Agile tech firms are experiencing unprecedented growth, and small, medium and even large tenants are demanding more flexible lease terms from landlords to manage the unpredictability of their requirements.
A new breed of landlord
WeWork’s emphasis on providing a flexible, services and community-rich workplace has led to it becoming Manhattan’s largest office occupier. With a market valuation of $20 billion and rival brands like Knotel rapidly growing too, the serviced-office is no longer the alternative, it’s fast becoming the norm.
These three trends have completely changed the leasing market and as a result, the responsibility for employee comfort now sits squarely on the shoulders of those that own or manage the building. Amenities, flexibility, and services are now king, and by appealing to a company’s staff a landlord has gone a long way to attracting that company as a tenant.
But with significant costs involved in transforming physical space to focus on these things, what else can landlords do to meet tenant demands in this new age of leasing?
Streamline digital interfaces and data
By using tenant engagement technology to supercharge amenities and offers, landlords can create a vibrant, services-rich building that doesn’t rely solely on the physical space to give users what they want. Tenants can order coffee or lunch to their desks, have laundry picked up, RSVP to that yoga class or book a flu shot to their building. Providing a unified digital interface streamlines operations and allows landlords to drive deeper engagement with the individual occupants. These systems also collect data, allowing landlords to analyze their offer and better tailor it to tenants if needed.
Activate, curate and experiment
Today’s tenants want experiences. Bring a lobby or another space to life through a tenant engagement program. By connecting these spaces to positive memories and fun events, occupiers are more likely to actively promote your property.
Focus on existing digital infrastructure
Whilst the modern tenant wants new experiences and services, making sure existing infrastructure works well is vital. It’s a minor investment but ensuring internet connectivity is fast, reliable and safe, is a sure fire way to create tenant loyalty. Similarly, ensuring frictionless cell phone signal within buildings is of paramount importance these days, and enables the success of more recent introductions to a building such as a tenant engagement app too.
If no one knows about it, no one will use it. Buildings with squash courts and basement change rooms have existed for years, but without a holistic communication strategy, the ROI of these spaces has been negligible. Tenant portals, digital lift screens and front-of-house teams can maximize use of these facilities.
As Manhattan’s landlords prepare for another highly competitive year ahead in the leasing market, neither scale nor market share will decide who gains the upper hand, but instead creativity, flexibility and a commitment to satisfying the end user. Landlords who drive deeper engagement with their customers through experiences, amenities, and communication will ultimately come out on top.