Tenant Experience Definition
In commercial real estate, the top owners and operators provide a premium tenant experience that helps businesses in the building attract the best talent. Office landlords employ a tech-enabled tenant experience strategy that emphasizes amenities in the building and the surrounding neighborhood and prioritizes community, content, commerce, and control, all within an app on the mobile devices of every occupant in the building.
Until recently, commercial real estate owners and operators found property investment success without paying much attention to the UI/UX that their end users experienced at their property – the individual employees at the businesses that lease the space and pay rent. Tenant experience (TeX) software has emerged as a solution to improve the daily experience for occupants while tapping into highly valuable insights that landlords did not have access to prior: tenant satisfaction data and overall usage of space and amenities. The leaders in this new category of software are creating an industry-standard approach to how landlords exceed occupant expectations through software.
Is technology necessary as part of a premium office tenant experience?
Commercial real estate is the largest institutional asset class in the world, totaling $14 trillion dollars in the U.S. alone, so while it is inarguably one of the most successful industries, many believe there is much room for improvement by increasing tenant satisfaction with technology. Office owners can certainly make design and aesthetic changes to their property, or add flashy new amenities, but without data and insight from their tenant community, they are likely going in blind on what their tenants truly want when it comes to these important investment decisions.
Further, commercial real estate is going through a similar shift that other industries have experienced in that value is seen not by innovating with physical assets, but by leveraging technology as a way to innovate on experience. Uber and Lyft did not transform the transportation industry by owning cars, and Airbnb did not transform the hospitality industry by owning homes or rooms, but they became billion dollar businesses by transforming the experience through software.
So while we are still in the early days of this software category, tenant experience software promises value to property teams in three distinct ways:
- Provide a premium tenant experience enabled by technology that you’ll come to rely on because your customers will leverage it to help them attract and retain the best talent. Once tenants interact with their workplace in an enjoyable, streamlined, and informative mobile interface that maps to their daily schedule, they won’t want to work in a place without it.
- Make data-driven decisioning commonplace, especially around high impact investments for your property: amenity procurement and tenant curation strategies to ensure ongoing tenant satisfaction.
- Experience NOI growth and asset value improvements by guaranteeing tenant retention, increased rents, and even new incremental revenue streams with services, retail integrations, booking & payments, and more.
There are a number of ways in which technology can enhance the physical aspects of a property. In our work and conversations with the top landlords in the U.S., we’ve narrowed down the features and components of an office experience that tenants expect. Below are what we believe to be the six pillars of a premium tenant experience at work:
People hate running errands after work. Can you give tenants back their time by curating on-demand convenience services onsite or nearby?
- TeX software enhancements and integration examples: Booking conference rooms; on-demand scheduling of beauty services, dry cleaning, car detailing, and more; order-ahead, take-out, and delivery of food and catering; tenant and retail rewards program, and more.
Employees love attending events and experiences that make work more fun and bring the community together. Are you organizing, sponsoring, and making it easy to discover entertainment options for tenants?
- TeX software enhancements and integration examples: Building-wide trivia on mobile; promoting, paying for, and RSVPing for building- and tenant-sponsored events; discovering neighborhood happenings, and more.
Employees prioritize office accessibility and businesses love anything that increases productivity for their team, so by making their commute as convenient as possible. you can greatly impact a business’ bottom line. How are you making it easier for tenants to get to and from work?
- TeX software enhancements and integration examples: Tenant carpooling services; shuttle schedule and access integrations; parking garage passes and payments; public transportation and traffic data streams, and more.
Employees and guests want their office building to be accessible but safe. Are you making it streamlined yet secure for them to gain and grant access? Do you provide consistent alerts around emergency protocols?
- TeX software enhancements and integration examples: Mobile access control; visitor registration and control; security alerts and procedure notifications.
People want to be part of communities that contribute to a broader social good. What initiatives, activities, and fundraisers are you organizing and facilitating to help tenants contribute to a good cause at their place of work which they visit every day?
- TeX software enhancements and integration examples: Controlling temperature, lighting, etc. of energy efficiency; fundraising for specific causes and collecting payments in-app; organizing, accessing, and RSVPing for volunteer opportunities, and more.
People intrinsically want to be healthy and will prioritize wellness initiatives if they are easily accessible and encouraging. How can you support and promote health and fitness as part of their work environment and daily routine?
- TeX software enhancements and integration examples: Booking and paying for fitness classes; accessing running routes, bike paths, local boot camps, free yoga or meditation popups; fitness retail reward programs, and more.
We believe that the six pillars of a premium tenant experience can be enhanced by applying a tenant experience software layer to the property that focuses on what we call the 4 Cs:
- Commerce – Enable your tenants to easily book and pay for food, amenities, events, and services and access perks and deals specific to the tenant community in a single interface that lives on the device in their pocket – their mobile phone.
- Community – Bring your tenant community together in real life, not just online. Facilitate in-person interactions by making them easier to discover and access via tech – this includes event management, messaging, and concierge functionality in tenant experience software.
- Content – Arm your tenant with knowledge about where they go to work every day and all of the different experiences, perks, and amenities available to them via in-app content and info, notifications, and directories.
- Control – Give tenants more control over their environment to ensure satisfaction. Give them streamlined mobile access control, booking and requesting services, and HVAC and lighting control.
When applied correctly, your property experience is enhanced by technology, and that technology ultimately gives you great insight into the aspects that are under or overperforming, and where you should make investments in improvements moving forward.
We discussed the three value props earlier in this post: 1.) provide a premium tenant experience, 2.) make data-driven decisioning about your property, and 3.) experience NOI growth and asset value improvements. Here are some of the specific benefits that specific professionals on property teams can expect:
- Own the relationship and avoid disintermediation with the end-user of your product
- Become an experience-driven, customer-centric organization
- Understand how tenants use your portfolio of properties with TeX technology
- Inform your asset strategies with tenant data to provide better returns to investors
- Provide tenant activity data to show investors property differentiation by market
- Stay ahead of the competition and be innovative
- Differentiate your property with tech
- Provide an unparalleled experience for tenants by building in convenience and community
- Leverage data to develop an informed asset strategy
- Drive NOI with tech and data-driven experiences that enable incremental revenue streams
- Ensure tenant satisfaction to drive increased retention and long-term rent optimization
- Make property management a profit center vs. a cost center
- With great experiences, focus on value creation instead of troubleshooting
- Save time on tenant engagement with efficient mobile tech
- Communicate seamlessly with tenants to increase satisfaction and reduce turnover
- Fill space faster by demoing HqO and property innovation while on tours
- Differentiate your sales process by showing more than just floor specs and pictures – sell the experience with data
- Match prospective tenants to the experiences and amenities they require by understanding and sharing data around how current tenants use the property
Community managers and marketing teams
- Build your brand on innovation and tenant-centricity and market your property as a tech-enabled destination
- Differentiate your brand from other CRE organizations by being seen as a thought leader and first mover on tech
- Attract innovative tenants that ultimately drive ROI by staying longer and attracting other top tenants by sharing their delight with the tenant experience
Tenant experience software makes your property more successful by making your tenants happier. We predict that in addition to a greatly improved day-to-day experience for tenants at their properties, landlords that use this technology as the software layer for their properties stand to make incredible gains in operational and investment efficiency, data-driven decisioning, and placemaking that ultimately drives asset value and NOI.
Learn more about how HqO makes this possible for landlords like Blackstone’s EQ Office, Jamestown, National Development, DivcoWest, and others.