The impact COVID-19 has had on commercial real estate is significant. However, not all shifts have been negative. According to Forbes, the pandemic has generated some innovative possibilities for the CRE market in 2021, including more affordable rental prices, smart building tech, and software specifically geared toward enhancing the tenant experience.
But do technology and cost savings tell the whole tenant experience story? Smart building tech firm ButterflyMX reports that today, “it’s less about location and price and more about providing a total experience your tenants will pay — and stay for.”
What is tenant experience?
The tenant experience consists of a broad set of factors ranging from onsite services and amenities to the intangible feeling of community and employee wellbeing. In short, employees want to work in a comfortable, productive, and flexible place where they can stay easily connected to each other and the outside world around them.
What do tenants expect?
There are the basics, such as ease of communication and giving feedback to building management, maintenance standards, and general aesthetic surroundings, but tenants today expect more.
JLL research reports that COVID-19 has driven employees to rethink their priorities in terms of quality of life, human interaction, and personal values. Companies that strengthen connections and provide communication to establish a clear purpose for the workplace will be well-positioned to retain and attract talent.
Further, tenant experience (TeX) software has emerged as a solution to improve the daily experience for occupants while tapping into highly valuable insights from property owners and operators. According to HqO, this includes tenant satisfaction data and overall usage of space and amenities; they cite six pillars of a premium tenant experience:
Give tenants back their time by offering on-demand services onsite or nearby, such as dry cleaning, car detailing, booking conference rooms, and food delivery and catering.
Bring the work community together by making it easy for tenants to discover entertainment options and neighborhood happenings.
Enhance their commute with services like carpooling, parking garage passes and payments, public transportation and traffic data streams, and more.
Smart tech like mobile access control, visitor registration, security alerts, and procedure notifications go a long way toward enhancing a feeling of safety.
People want to contribute to the greater good and know that building ownership and management feel the same way.
Find ways to support and promote health and fitness as part of their work environment and daily routine.
Why does it matter?
It’s a fact: The better the tenant experience and the more satisfied tenants are, the more you can expect increased renewals, healthy financials, and a robust prospect pipeline.
The link between tenant satisfaction and renewals directly impacts tenant retention, cost reduction, asset value, and the ability to increase rental rates.
In back-testing conducted by KingsleySurveys, client renewal intentions revealed in survey responses are highly predictive: 75%-80% of tenants who indicated they are “likely to renew” actually did so.
Bottom line: If tenants are not satisfied, they’re more likely to leave. It costs a property owner more money and resources to acquire a new tenant than it does to keep one for an extended period.
How can you measure tenant satisfaction?
Getting a clear picture of what’s going on in the hearts and minds of tenants is best achieved through third-party surveys, which provide an objective snapshot of what’s happening without the inherent bias that can come with self-surveys.
As a trusted partner to the world’s leading CRE organizations for over 30 years, KingsleySurveys offer insights into critical topics such as tenants’ current needs and priorities, renewal intent, and the likelihood of recommending the commercial property to others. These insights are always relevant and valuable, regardless of the size of your portfolio.
The KingsleySurveys features and tools within Grace Hill’s Commercial Survey Solution also include employee surveys, client/investor surveys, comprehensive policy management, and benchmarking and analytics. KingsleyIndex™ is the industry’s largest, most comprehensive benchmarking database, and it is used to level-set, compare, and track your property/portfolio performance against the industry.
Keeping a finger on the pulse of tenant satisfaction
Success in CRE today results from combining a data-driven approach with end-to-end workplace solutions that contribute to unmatched tenant experience and satisfaction.
Long-term, CRE executives can build asset value, increased renewals, and a robust prospect pipeline by focusing on tenant satisfaction and periodically gauging client and investor perceptions, gathering competitive intelligence, and benchmarking to industry peers.