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The Office Of Tomorrow Focuses On Amenities And Wellness

The Texas Tower is going to be as grandiose as the state it resides in.

Hines and Ivanhoé Cambridge are developing the 47-story, 1M SF office tower in Houston and its features could be described as amenities on steroids. 

CoStar News' Candace Carlisle, Hines'  John Mooz, Gensler's Jennifer Mejia, Hana's Brian Harrington and Woodbine Development's Kris Harman at the Future of Office panel June 26 at the National Association of Real Estate Editors conference in Austin, TX.
CoStar News' Candace Carlisle, Hines' John Mooz, Gensler's Jennifer Mejia, Hana's Brian Harrington and Woodbine Development's Kris Harman at the Future of Office panel at the National Association of Real Estate Editors conference

Tenants and their employees will have plenty of natural light coming from 10-foot, full-height windows. There will be a high-performance fitness center, access to plenty of food and beverage options, cold storage lockers for groceries and Amazon lockers.   

Green space will be abundant. Not only will tenants have access to public parks outside the building, they will also be able to check out several public gardens inside the high-rise tower. Some tenant employees on the ground floor will have access to a private garden, a Hines official said.

Workers will have the ability to set their own temperature at their workstations and visit an outdoor seating area designed like a carousel (called an urban pavilion) to meet and collaborate. 

“The war for talent is a very real thing,” Hines Senior Managing Director John Mooz said at the National Association of Real Estate Editors conference in Austin, Texas. “This is a hyper-amenitized building. ... It is intended to be responsive to the recruiting and retention needs of all of the tenants.”

What Hines and Ivanhoé Cambridge are developing with the Texas Tower is a reflection of the current office development landscape. 

With the national unemployment rate continuing to fall — at 3.6% as of June and the lowest rate in nearly half a century — companies are in fierce competition to attract and retain talent. 

For office developers, this means building, rehabbing and putting in features and amenities that will help draw in tenants that want to separate themselves from the rest of the pack.  

“This is really driven by the war for talent," said Brian Harrington, chief experience officer for Hana, a CBRE-backed flexible office provider. "As occupiers and owners of buildings look at assets and workplace environments, it’s really about highlighting, capturing and retaining employees that I want in that space. That’s what is driving a lot of the innovation." 

The Office Of Tomorrow Focuses On Amenities And Wellness
Rendering of Hines/Ivanhoé Cambridge's office building in Downtown Houston

Driving this change in office space is the need to appeal to the millennial workforce. 

For the first time in U.S. history there are five generations of workers in today's workforce. But the most in demand are millennials, those born from 1980 to 2000, the largest group at 68.2 million workers, Cushman & Wakefield Chief Economist Ken McCarthy said in a separate panel.

"They are the best-educated generation in history," McCarthy said. "That’s why everyone wants to hire them. They are the most technologically advanced."

With a focus on employee wellness and tenant retention, the office of tomorrow is being designed with plenty of things that millennials seem to favor in an office space — a lot of greenery, collaborative spaces, natural light and large windows with views of the outside world, Crescent Communities Director of Development Amy Bezanson said during a panel on Designing for Wellness. 

The goal for developers and companies, Bezanson said, is to create an environment that can improve the productivity of their employees.

The right design and wellness amenities could make employees want to stay in the building and work longer for that company. Bezanson said if they are excited about the building, it makes them feel better and makes them more productive.  

Crescent Communities is developing the Ally Charlotte Center, a mixed-use development with a 26-story office building with ground-level retail and a separate 350-room hotel, in Charlotte, North Carolina. 

Aside from natural light coming from 10-foot windows and views of mountains and treetops, the building will feature a high-level water filtration and air quality system and improved ventilation, Bezanson said. There will also be a 20K SF public plaza and park space so tenants can eat and relax outside. 

Ally Charlotte Center, 601 South Tryon St., Uptown Charlotte
Ally Charlotte Center, 601 South Tryon St., Uptown Charlotte

But how much do tenants value these amenities?

A tremendous number of older buildings would need serious capital improvements to keep up with the times if this trend were to continue.  

Several panelists and experts said it is hard to measure the impact of such amenities. Anecdotally, one panelist said NerdWallet turned down leases for several buildings because those buildings didn't allow pets.

"The profile of that company is very young and they wanted to be able to bring pets," Devine Real Estate Guide principal Alice Devine said.

Devine said the building NerdWallet chose is an example of a landlord installing a certain amenity in its building to attract tenants. 

Mooz, the senior managing director at Hines, said with today's competitive employment market, owners can't afford to leave out amenities or not improve their buildings for tenants.  

"An owner that does not employ a strategy of revitalizing an older-generation asset is at serious risk of losing market share," Mooz said.