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— Office Properties Quarterly — September 2016
S
ince the sixth century B.C.,
Proverbs of Ahiqar, we have
known that a bird in the
hand is worth two in the
bush. This ancient proverb
can be related to almost all aspects
of our lives, but I want to focus on
how it relates to tenants in our
buildings. Simple logic dictates that
the most-likely tenants to occupy a
building in the future are the exist-
ing tenants. They are our symbolic
bird in the hand. Add in the fact
that these “birds” can be renewed
with zero downtime and lower
costs, they are more like a golden
goose.
While it is a higher probability
that existing tenants stay at the
building, it is not a certainty. Many
factors play a role in the occupancy
decision of a tenant. However, there
is one aspect as property man-
ager we can control: the tenant
occupancy experience. From the
moment they enter the garage until
they leave, we have the opportunity
to set the standards of the tenant
experience. This experience is bro-
ken down into two distinct catego-
ries – tangible and intangible.
Tangible aspects of the occupancy
experience are based on the condi-
tions of the asset and amenities it
provides. Many times people think
the tangible aspects are impossible
or too costly to change, which is
true for some items like parking
count or location. However when
it comes to amenities, we have the
ability to be cre-
ative.
As an overall
industry, we do a
good job under-
standing tenants’
needs. These needs
may include hav-
ing conference
rooms, a fitness
gym and bike stor-
age areas. These
are a great start to
a building’s ame-
nity package. How-
ever, if you want to
reach a higher level of tenant satis-
faction, the building must provide
more. In the end, we as landlords
need to learn what elements our
tenants would enjoy, not just focus
on their needs.
The great thing about focusing
on enjoyment is that it actually is
fun. You can see your tenants get
excited about the possibilities, and
it involves everyone in the build-
ing. While you will get some crazy
and expensive ideas, there is some
lower-hanging fruit that will allow
you to separate your building from
the others. For example, maybe
you have some extra turf area that
becomes a putting green or bocce
court. Maybe there are some park-
ing spaces in the garage that never
get used – you can make a self-
service car wash by simply adding a
hose. Many of these ideas are based
on using what you already have and
activating an area that currently is
not used.
In one of our buildings, for
example, we converted basement
storage that was not being used
into a speakeasy and bowling alley.
While this example is not exactly
low-hanging fruit, it highlights how
we all can be creative in selecting
an amenity package. Adding enjoy-
ment into the tenant mix will sepa-
rate your building and make it less
of a replaceable commodity.
The other side of the tenant expe-
rience is more intangible. This is
based on being the ambassador, the
concierge and, even sometimes, the
therapist for the building. In the
end, this is customer service 101
with a simple goal of helping ten-
ants feel at home.
In 1976, Ebbesen, Kjos, and Konec-
ni investigated the critical factors
in predicting friendship forma-
tion. The research concluded that
whether people became friends was
most strongly predicted by their
proximity to one another as prox-
imity serves to amplify the informa-
tion that is relevant to the decision
of becoming friends. As property
managers, we have proximity to our
tenants that allows for us to form a
positive relationship, however, we
have to be careful.
As humans we have a tendency
to hold on to negative interactions
with more conviction than posi-
tive ones. I have seen this ratio be
anywhere from one negative inter-
action offsetting five to 30 positive
interactions. While we may all have
a different number for this ratio, it
shows that a negative interaction
is powerful and time-consuming
to rectify. This is why we should
focus on how many quality tenant
interactions we can create. It’s vital
to put ourselves and our teams out
in the buildings, talking and social-
izing with the tenants. Work with
them to understand their desires
for their tenancy and show them
why their wishes and needs are
important to us. If we only call ten-
ants when we need something or
something is wrong, it is not sur-
prising that we end up with a nega-
tive relationship.
It is a complex mixture of both
the tangible and intangible aspects
of tenant relations that creates an
overall successful tenant occupancy
experience. It takes creativity to
come up with a custom program to
bring joy to your tenants and con-
sistency to form the trust that the
joy will last throughout the entire
renewal term. If either aspect of
the program is off balance, it will
increase the amount of work and
concessions the leasing team has to
provide to keep the tenants satis-
fied. That is why truly focusing on
the overall tenant occupancy expe-
rience can help limit the number
of your golden geese migrating to
other buildings.
s
Hunter Marr
Director, Real
Estate Services,
Unico Properties,
Denver
Management
