Q&A: KBS' Brett Merz On Why Office Owners Need To Invest In Technology
A well-connected, technologically adept office has become a requirement across all industries. From finance to marketing, more businesses require reliable access to internet and cellular infrastructure to participate in the digital economy. For KBS, one of the largest buyers of commercial real estate in the U.S., investing in well-connected properties and achieving Wired Certification has become an essential part of showing prospective tenants that the company is invested in their success.
Bisnow sat down with KBS Senior Vice President and Asset Manager Brett Merz to learn more about how KBS invests in its office properties, as well as Merz's take on the future of technology in the workplace.
Bisnow: KBS has achieved Wired Certification distinctions for best-in-class connectivity across properties in Washington, D.C., Dallas, Chicago and several markets in the Northeast. As you continue to offer well-connected spaces in those markets, what types of tenants have been drawn to strong connectivity?
Merz: The investment in technology resonates across all industries, not just technology. Whether it is a finance, insurance or real estate company, all are inquiring about the technological capabilities of their buildings. It is a required piece of a tenant’s overall business plan, and therefore part of their real estate decision criteria. A well-connected office provides flexibility, efficiency and cost reduction at the corporate and employee levels. Reliable connectivity helps employees communicate with team members, and they want to be connected to everything at all times. A technologically adept company also often finds this working to its advantage when it comes to new employee recruitment and employee retention.
Bisnow: What inspired you to invest in marketing these properties as best-in-class tech assets?
Merz: Understanding the needs of our customers — our tenants — and wanting to provide an overall best-in-class environment and experience are the real drivers for us. The more we can contribute to the success of a company, the more it creates a partnership with our customers that extends beyond a typical tenant-landlord relationship. Tenants in the market have many options. We realize that, and we are always trying to figure out ways to be ahead of the competition and address tenant needs. Showing continued investment in our buildings by providing modern, tech-savvy workplaces is so important in demonstrating to our tenants that we want to see their businesses succeed. When they succeed, we succeed.
Bisnow: What amenities are you seeing drive the most value in your markets?
Merz: Amenities range from restaurants and food halls, full-service fitness centers, conference centers and tenant lounges to bike programs, wine cellars, game rooms and lounge areas. Amenities are a huge piece of the puzzle, and we are constantly trying to stay ahead of the curve. I think a big piece of the amenity program also needs to include a variety of general services, not just physical spaces. Employing up-to-date technology infrastructure is also critical. The goal is always trying to provide a better experience and environment for all our tenants’ employees.
Bisnow: What technology are you most excited to see implemented in office properties?
Merz: We have gone from improvements in after-hours HVAC to interactive smartphone apps and distributed antenna systems, and we are improving daily in those areas. I still think we can make a marked improvement in those areas to increase efficiency for everyone. I’m also excited about the new technology that is helping create a better community among the tenants within the building, and that is merging the building with individual technology to improve the experience of security and access to the building. We have property websites where tenants from different companies within a building can sign up for special events that we sponsor and connect. It’s amazing the way technology has helped build a sense of community at many of our properties.
Bisnow: If I were a real estate owner or developer reading this, what attributes of my building should I be concentrating on to ensure I'm setting my assets up for success today and 10 years down the line?
Merz: We have moved beyond general economic terms in the sense of rent and tenant improvements. Economics is always critical, but decisions are no longer made on economics alone. The focus is now on value, flexibility, amenities, services, technology and the overall experience of being part of the building. It used to be that a company’s building was more of a box, a commodity, so to speak. Today there is a real shift in thinking, where the physical building, the location of that building and the amenity package are a big part of the business strategy. Companies have realized that to attract the right type of talent, you have to offer them the right location, the right property and the right set of amenities so that they can thrive.
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