Office environments have undergone a pivotal transformation from a resource to a touchpoint for collaboration, brand, and culture. What should landlords consider prior to making capital improvements in a building’s public areas to support these needs?
With so much change happening in the tenant space of an office building, the opportunities for innovation in a building’s common areas are not far behind. Today’s commercial tenants are evaluating building features, shared amenities, and public spaces, to see how these can augment or extend their own built environment. What should building owners and managers consider prior to making capital improvements to support these needs?
Starting With a Strategy
Landlords who take a long-term value approach to ownership may want to make important and lasting improvements, possibly phasing them over time. Those owners looking to more quickly maximize the potential for resale might take a different approach. For both, the key is developing a strategy based on which financial decisions involved in renovating public spaces such as a building lobby will be made. A lobby itself doesn’t earn rent, though a proportionate share of the common areas is factored into the tenants’ leases. Since they are ultimately absorbing some of the cost, and especially as office rents continue to increase, tenants are expecting their building’s public spaces to be more useful and engaging.
A well-positioned building can attract and retain tenants in any economic cycle. In a downturn, amenities can be a key differentiator. During a boom, new buildings come online and boast the latest in integrated technology and amenities, which can influence owners of existing buildings to modernize to remain competitive.
At 301 Howard Street in San Francisco, the building ownership undertook a wholesale renovation of the lobby and common areas despite a relatively low vacancy rate. Instead of a quick play to attract new tenants, this investment was intended to keep the building attractive to existing tenants in the long-term, especially technology companies who had started to populate the building. The newly revamped public areas would come online ahead of major lease expirations and make a tenant’s decisions to stay an easier one. The redevelopment efforts included relocating the building’s entry from a corner location to a proper Howard street address, which, along with the dramatic light-filled and restrained lobby interior, created an entirely new identity for 301 Howard. Other key components of this transformational effort were the relocation and optimization of adjacent retail spaces and a new streamlined glass façade. The project scope also included new amenity spaces - a visitor center, café and lounge spaces, locker rooms and a fitness center, all features high on any tenant’s wish list.
One of the primary drivers to reposition a building is brand identity. Does the lobby’s image align with its perception in the market? Lobbies form the first impression of a building’s character, quality level, and even about how the landlord may provide and manage services in the office space.
In Chicago’s South Wacker Corridor, a number of office buildings built in the 1970s and 80s were facing competition from newer buildings and large historic properties being renovated not only downtown, but in the emerging West Loop area. In response, the building owners of 300 South Wacker sought to reposition their building by providing amenities relevant to a modern tenant clientele. The result is a hospitality-influenced lobby, a café, fitness center, bike storage, an outdoor terrace with retracting glass wall and views of the river. And a large tenant lounge, complete with a food truck that serves an ever-changing menu from a different pop-up vendor each day. The result is inviting and comfortable as well as exciting. Tenants are drawn to these amenities as an extension of their own space in the building, and frequently meet visitors over a coffee or a casual bite to eat.
Improving street presence and brand may mean relocating a building’s entrance entirely. For 50 California Street, a recent lobby renovation involved recapture of an existing point of entry on Sacramento Street into retail space. This move, along with new building signage, outdoor stone paving, and a new frameless glass façade, focuses circulation towards the primary entrance on California Street, orienting visitors coming from nearby public transit and emphasizing the building’s identity. In addition to adding retail spaces or new tenant amenities, clarifying a building’s points of entry can help reshape its image in relationship to the neighborhood.
When employees can work outside of the office, what draws them to certain spaces over others? A neighborhood café is a popular choice because it provides a variety of benefits in one location: the ability to do focused work, being socially connected, comfortable seating, and of course, custom-order beverages. Activating a building lobby with amenities like a café, can transform a merely transitional space into a go-to destination. Landlords often have to balance the needs of their retail and office tenants, and a socially active lobby can support both.
At 275 Battery Street in San Francisco, an underutilized retail space was recaptured to create a bustling café, open to the lobby and serving both tenants and visitors. The physical transition from retail to lobby space was kept entirely open and seating areas were extended into the lobby itself to blend the two environments. The result is a new destination space within the building. Tenants are encouraged to use of the café for meetings, interviews, and events, and many casual visitors stop for a coffee before or after a trip to a tenant’s office. Tenants in the building may now think twice before purchase that expensive Italian espresso machine for their office, since this service now exists as a building amenity.
To make office reception areas more productive, these spaces increasingly function more like a concierge desk or hotel lobby with a variety of services offered. Advances in technology and changing approaches to security have also shifted the perception of a lobby’s main desk and the staff behind it. As electronic turnstiles, cameras, and destination-based elevators help control access, security desk personnel can redirect their focus towards tenants and visitors with questions or in need of assistance. The desks themselves are generally becoming smaller with the aid of technology. In lieu of a monument tenant directory, lobbies now employ electronic displays that can easily be updated or eliminating them altogether.
More landlords have also integrated video technology in lobbies and elevator cabs. In addition to video as a brand element, tenants can get updates on rideshare or bus arrivals as well as on traffic delays, news, or weather. Adding modern security features or touchpad directories, even destination-based elevator controls, can help position the property to remain competitive with its newer neighbors, especially in tech-savvy markets where tenants expect some of these features.
Creating Lasting Value
What should owners and operators know when applying today’s office design trends to a building’s common areas? Community spaces matter. While not every lobby might practically serve as a hub for tenants and visitors to share information and socialize, every public space in a building has the potential to become a memorable destination. A strong identity, clear circulation, modern technology, and a connection to the neighborhood context all create a sense of place. Efficient use of real estate means making spaces work in multiple ways and being more flexible. Adding meaningful amenities and services makes tenants feel supported, more at home, and can help reduce costs for a tenant’s own buildout. Building owners see a return on these investments when leasing rates remain high even in downturns, and when entire districts thrive as each building owner improves their part of the neighborhood.