Tenant experience technology is a continuously evolving landscape. It’s one of the many reasons I’m excited to interface with our customers and come to the VTS office every day. Over my career building products that blend physical and digital experiences, the market dynamics in CRE and industry momentum for tenant experience specifically are unmatched.
Understanding and solving for the needs of CRE owners and operators is a foundational part of my role at VTS as VP, Product, Tenant Experience. Here’s a glimpse at the top trends we saw emerge over the last quarter.
Tenant expectations are higher than ever….yet again
Big businesses are bifurcating on RTO, with the likes of Amazon and Meta mandating in-office attendance, and others like Atlassian, Airbnb, Dropbox, GitLab, and Okta saying they’re remote-first or office-optional. The future may not be entirely remote or 100% in the office, but split between companies embracing one or the other.
Regardless of a tenant’s workplace strategy, one thing is clear: they’re looking to occupy spaces that support both their workplace strategy and brand identity.
Through VTS’ proprietary data, it’s clear that the tenant “flight to quality” persists across all key markets. The top 10% of buildings (newer/updated, with a blend of digital and physical amenities and experiences) are getting near or close to pre-pandemic rents. But the bottom 50% are dramatically below pre-pandemic rents. From a rent perspective, high quality buildings have rebounded far better from the decline we’ve experienced over the past few years.
How to sweeten a return to office mandate
What exactly about the spaces mentioned above is desirable to tenants? Location, the neighborhood, nearby retail options, and in-building amenities are a huge contributor to the experience a building provides.
But in today’s tough economic environment, many owners still don’t have the capital to improve the physical spaces and amenities in a building. Investing in high quality digital experiences, which are less capital intensive, can give owners and operators more flexibility to showcase amenities, engage tenants, and ultimately attract and retain them. It’s also an opportunity for owners and managers to adapt to each tenant's needs and their unique workplace strategy.
Is a tenant pushing an in-office mandate and looking for workplace engagement and perks to sweeten their talent’s return? Are they a hybrid company, where desk booking is critical? Either way, tenants can’t do it alone and are looking to you as a partner.
Another approach we’re seeing owners take is supplementing the experience of one building with access to another. For example, in a building with few amenities (or even none), granting access to the amenities in nearby buildings helps tenants of the former feel like they’re getting more value.
Owners are evaluating their partners
In addition to the dynamics and data described above, owners continue to face high interest rates and a challenging economic environment.
What’s an opportunity that owners do have control over? The vendors and partners they choose to work with. Every owner and operator I talk to lists centralization and consolidation is a top priority. Paying for and managing a wide swath of point solutions is costly, unsustainable, and unacceptable given today’s environment and challenges.
Brokers can access the benefits of tenex, too (pun intended)
VTS has recently showcased the importance and benefit of seamless access with Apple Wallet for VTS Activate. But like many aspects of VTS Activate, our customers continue to adapt the configurability of the platform to solve challenges and create new solutions.
While it’s not new for brokers to use a tenant experience app during a tour, what IS new is touring a space and accessing it with just a tap. With the key to the building and every space on their iPhone, brokers show prospective tenants not only the physical spaces, but the digital experiences and technology you’ll deliver. Access is a critical, frequent touchpoint–what better of a way to tour a building (and sell tenants on it) than with the best of a building, and access to everything in it, in the hands of your broker?
Now let’s look forward. Here’s what we're betting will be big for the rest of 2023 and into 2024.
Owners and operators can’t afford to wait on the sidelines
It’s not just you and your teams that must break away from the status quo. Tenants expect more from their owners and operators – they’re not just looking for a sleek lobby or in-building amenities, they’re looking for you to deliver exceptional digital experiences. Tenants want to partner with owners and operators that support their workplace strategy, and ultimately, their brand.
Companies are (or already have) defined their workplace strategy for the fall and into the new year. Are you ready to support them and every touchpoint that matters?
This isn't just fodder aimed to provoke urgency. To prove it, we've funded a global tenant survey. We wanted to hear from companies across the US, Canada, and Europe and give you quantitative data to shape your strategy to attract and retain them. Data is rolling in and our teams are excited to share the findings in the weeks ahead. I promise it's a report you don't want to miss!
Workplace suite access – once a tenant responsibility, now a partnership opportunity
Until recently, tenant suite access was perceived as an isolated problem, solely on the shoulders of tenants. That’s no longer the case, with many owners now seeing this as an opportunity to partner with tenants. With tenant retention being a continued focus for owners, elevating every part of the tenant experience is crucial.
Even in an open building, accessing the suite and shared spaces is a challenge for tenants. This frequent touchpoint is a reflection of a tenant’s workplace identity, setting the stage for how and when their talent accesses physical space. Again, tenants are looking to you to give employees a better experience and support their workplace strategy they’re actioning against. Tenant suite access is the perfect opportunity.
One app for everything in the office…and the home
Multifamily continues to be top of mind for owners, operators, and everyone in the real estate industry, with continued headlines about converting vacant office buildings for multifamily use, owners shifting investments toward multifamily, or surges in supply.
For residents themselves, the lines between “work” and “home” are and will continue to blur. Because of these forces, we’re hearing owners and operators say they’re looking for a single partner to power their in-person experience across ALL of their asset types. Building on the themes above of intentionally choosing a partner and consolidating point solutions, why not compound the benefit by selecting a single physical and digital experience solution across your entire portfolio?
With mixed used assets continuing to thrive, this trend will only become more pronounced. The desire to create a single and cohesive experience for “live, work, and play” has been said before…but what’s needed behind the scenes to accomplish this?
Only a partner with built-in yet highly configurable technology can adapt to not only your asset types, but to the people within, ultimately driving the insights your teams need and more value for everyone.
Want to see what's new in VTS across the entire tenant lifecycle? Watch our on-demand webinar to see what's new in VTS Activate and across the VTS Platform.
