If this past year has taught us anything, it’s that major change is already underway for the commercial real estate (CRE) industry. CRE’s recent digital transformation has shed light on several important focus areas for office landlords and property teams, such as re-evaluating a portfolio’s technology stack and, more importantly, getting to know the tenants within their buildings.
Enter the TAMI vs. FIRE debate. As the modern workplace around us is changing, so are our opinions on the different types of tenants we serve. Once thought of as “unreliable,” those who work in the technology, advertising, media, and information sectors (or TAMI) are now highly valued in today’s tech-enabled world. When it comes to making strategic decisions across one’s portfolio, TAMI tenants have taken precedence over those who work in the financial, insurance, real estate, and legal (or FIRE) sectors. On the other hand, FIRE tenants are playing a key role in the return to work, getting an early start in transitioning a fully remote workforce to a more hybrid model.
As a result, TAMI tenants have a more significant influence over the look and feel of the modern workplace, particularly regarding the types of experiences landlords and property teams provide in their buildings moving forward. However, both TAMI and FIRE tenants are seeking more consumer-first workplace experiences as they head back to the office.
Breaking Down the Differences Between TAMI and FIRE
We’ve established that TAMI tenants encompass the more digitally-oriented industries, and FIRE tenants cover the more traditional sectors. Now, let’s take a look at why you should care.
The answer resides in economic perception and value. In the past, FIRE tenants were seen as more appealing and reliable when compared to TAMI tenants because of their stable incomes, long-term leases, and ability to survive in the market. The technology market has overwhelmingly represented the startup world in the United States. Most of these companies were stereotyped as “unstable” due to their inevitable need for growth (thus, requiring shorter, flexible leases) and the risks associated with getting a business on its feet.
Recently, this view has significantly changed. In particular, tech startups have increased in value and are garnering significant attention from venture capitalists, having brought in over $1.6 trillion in funding in 2019. Despite (and in many cases, because of) the COVID-19 pandemic, the sector has continued to grow significantly. In 2020, 4.4 million new companies started operating, with the artificial intelligence sector acquiring $8.2 billion in funding alone.
Additionally, venture capital funding increased by 14% in 2020, backing TAMI tenants with money that solidifies their value and longevity in the market. This financial support — alongside the technology that many TAMI tenants create — makes these tenants incredibly desirable to office owners and property teams looking to attract and retain the top talent in the market. As these trends gain popularity, FIRE tenants are taking note: many have already begun adopting workplace technologies and flexible policies to provide exceptional experiences to their own employees.
How TAMI and FIRE Tenants are Re-Shaping the Office
Another key consideration for the office is the fact that the number of TAMI tenants is exponentially growing. Art Zeile, CEO of DHI Group, explains this phenomenon: “We believe that there will be a post-pandemic explosion of interest in technologists, and that includes within startups, with so many focusing on technological innovation.”
Additionally, a Microsoft report anticipates an increase in technology-oriented jobs from 41 million in 2020 to 190 million in 2025 — painting a promising future for the sectors under the TAMI umbrella.
With their emerging presence, TAMI tenants are not only highly sought-after, but unavoidable. Their influence, alongside new health and safety requirements for the office and tech-enabled trends, has shifted the needs of FIRE tenants. Today, 55% of office employees prefer a combination of in-person and at-home working. In fact, many FIRE tenants have already returned to the office in varying capacities. Thanks to recent office innovations, this is all entirely possible.
Many CRE experts agree on what this means moving forward. Not only will flexible workplace policies become commonplace, but leases will get shorter, and the office will begin to transform into a space catered towards more vital and meaningful collaboration. Modernizing your building amenities will be critical. To offer memorable workplace experiences and keep people coming back, you need to create value and benefits that compete with the home office.
A Tech-Enabled Future
Although the debate regarding the value of TAMI versus FIRE tenants continues, it’s clear that having a flexible, technology-forward office is not just a trend — instead, it’s a requirement for a modern tenant experience.
Want to hear how HqO can help your property keep up with evolving tenant demands? Schedule a free demo today.