Why Commercial Real Estate Property Managers Should Take A Cue From The Hospitality Industry
From the moment a guest checks into a hotel to when they pack up their bags, much of their experience is defined by the level of service they receive. Hotel guests want the latest in convenience and comfort, and they want staff they can rely on to address any concerns. Small moments of interaction can often lead to a happy customer, one who comes back for repeat service.
This way of thinking has now caught on across other areas of commercial real estate with long-term tenants. Across multifamily and office properties, it is no longer enough to provide users with a well-maintained space. That space must come with services that enhance the level of comfort, productivity and customization tenants have at their disposal.
This sea change in how commercial real estate professionals manage their properties is the takeaway from a webinar hosted by Granite Properties Director of Property Management Jessica Warrior. The webinar addresses “The Rise of Hospitality Level Service in the Commercial Office Environment.”
“Multifamily owners and commercial office providers have realized the benefits of hospitality-like service,” Warrior said. “The hope is that tenants will be more likely to renew their leases if they feel a strong community bond, which is something hospitality can foster.”
The experiential economy has been a major driver in the demand for more social activities. Retailers can no longer just offer floors of inventory but must allow shoppers to touch and interact with products. Nike, for example, has several flagships stores where shoppers can test out shoes in different environmental and sports conditions.
In the multifamily space, landlords compete to attract and retain tenants with services like a concierge or an online grocery pickup area. Concepts like co-living have grown in popularity, offering residents curated social experiences and shared living spaces. Rent also includes home cleaning services and shared supplies and utilities. By focusing on convenience and community, co-living mirrors the experience of hotel living for long-term tenants.
Warrior’s focus is on office space, which has seen perhaps the most radical example of the adoption of the hospitality model, as coworking providers have gained increasing market share in recent years. Coworking integrates a major focus on design and build-out combined with the curation of community and shared interest groups.
Coworking spaces often serve as overflow for the existing tenant base of a building and can provide additional amenity space that the landlord can benefit from but does not have to maintain. The shift emphasizes a transition toward office space as a service, where landlords focus less on lease length and size, and more on the user experience.
Technology has also accelerated the rise of hospitality services in other commercial properties. Property owners can use amenities like 24/7 concierge service and automated parking technology to improve how tenants interact with the space. Other technologies are less visible. The tracking of HVAC and electricity usage, for instance, leads to lower costs and improved energy efficiency for tenants and landlords.
As the Internet of Things becomes more widespread, property managers will also be able to tap into user data to better understand tenants and figure out their needs.
“There is an influx of technology that will help all property managers be more effective in managing their properties and most importantly, serving their tenant base,” Warrior said. “All of this creates an umbrella of ‘hospitality,’ which, to me, defines anything from experience to reduced costs and that ultimately makes our buildings more desirable.”
The adoption of this umbrella is part of a growing amenity arms race among Class-A property owners to attract tenants. But creating hospitality-like services isn’t restricted to luxury properties. Owners of all property types should look for cost-effective ways to ensure that a tenant or customer feels heard and is part of a larger community.
“Hospitality is ultimately a feeling that you, the customer, are important and the business is thinking about your needs,” Warrior said. “As a landlord, there are many things you can do for your customers that don’t cost a lot of money. Yoga on the lawn, movies in the lobby, sponsored lunch and community involvement opportunities are all things that can be done easily and with minimal cost.”
Real estate companies have to strike a balance between using technology to make services like rent payments and maintenance requests more efficient while also encouraging employees to act as a resource for tenants. For Warrior, this starts with thinking about the team.
Property owners should focus on hiring staff who understand the mission and values of the asset while retraining existing team members to align with those goals.
“We must adapt to this new higher service level style, or we will be left behind,” Warrior said. “Successful real estate firms will be those that have successfully integrated hospitality into their platform.”
To learn more about how commercial properties can learn from the customer service ethos of the hospitality industry, watch Warrior's IREM webinar here.
This feature was produced in collaboration between Bisnow Branded Content and IREM. Bisnow news staff was not involved in the production of this content.