S.F.'s Biggest Developers on What Coveted Tenants Really Want
It can take the right mix of location, amenities and office features to attract and keep tech tenants. We're gathering some of the biggest players in the red-hot market to tell us what tech tenants really want at Bisnow's San Francisco Creative Office & Tech event starting at 7:30am Tuesday, Dec. 15, at Hotel Nikko.
Among our panelists is Kilroy Realty SVP for asset management Rick Buziak, who tells us the firm has 3.9M SF of operating properties in the Bay Area, and the company has four projects under construction for an additional 1.7M SF of space. He says tech companies are looking for locations that fit with their employees' lifestyles, which are increasingly urban. Employees want to walk, bike or take public transit to work rather than sitting in a car. They want easy access to coffee shops, bars and restaurants. They also want to be surrounded by like-minded companies in buildings that are smart and efficient, he says.
At 350 Mission St (above), a 450k SF office tower in SoMa fully leased by Salesforce and a soon-to-come Michael Mina restaurant, Kilroy recently unveiled a media wall in the lobby that displays digital art. The 30-story building is adjacent to the future Transbay Transit Center and near Caltrans as well as other Class-A office and luxury high-rise residential buildings. It is designed to establish a new Platinum LEED benchmark.
Rick tells us Kilroy is a market leader in creating productive, healthy work environments. Part of that comes down to knowing the kind of amenities companies and their employees are seeking. "None of this is half-hearted or by accident," Rick tells us. "We design our buildings from the inside out."
At 360 Third St, a 430k SF office building in SoMa, a roughly 5k SF roof deck (above) complete with a bar, fire pits, WiFi and a sound system, adds another dimension to the work environment, pitched as a great place to collaborate, work out or take a break from the day.
Rick tells us companies locate in the Bay Area because they want to be here; they accept the higher operating costs because they know it's important to be in the Bay Area to recruit and retain talent and be surrounded by other top tech companies.
The overall design of The Exchange on 16th in Mission Bay (where Kilroy broke ground earlier this year) lends itself to what tenants are seeking, Rick tells us. The site is designed with biking, walking and transit in mind.
Comprised of four buildings, The Exchange will have 720k SF of Class-A space and amenities including balconies and rooftop and outdoor workspaces (with wireless connectivity, of course!), restaurants in the lobby, waterfront parks and interior workspaces (above) that can be furnished to lend themselves to collaboration (something Rick tells us is key for tech tenants).
The Exchange has a variety of tenant prospects, both tech and non-tech, with about 60% of the interest coming from non-tech companies, according to the Q3 shareholder call. Kilroy anticipates The Exchange will be substantially leased ahead of its scheduled completion in Q3 2017.
Another of our expert panelists is SteelWave managing director Edward Nazaradeh, who tell us his company is attracting tech tenants by focusing on proximity to public transportation, parking and access to off-site amenities.
For example, SteelWave's Sunnyvale Business Park not only is walking distance to Caltrain, but also downtown Sunnyvale. The park, with more than 623k SF of office and R&D space, has nine two-story buildings and one three-story one set up in a park-like campus. The site includes outdoor seating areas (that fire pit above looks particularly cozy this time of year), table tennis (shown below) and a bocce court. Because it's close to downtown, employees who work at the park can find dining, coffee and banks nearby.
Edward finds that tenants are looking for nontraditional spaces and large open spaces with a direct view to daylight. He says they also want collaborative spaces or areas within the building common areas, play areas and on-site amenities. He tells us such demands are more specific to the Bay Area than in other regions, though there's some similar demand in Southern California, followed by Seattle and Denver.
Ygnacio Center in Walnut Creek (above) is walking distance to BART and near Interstate 680 and Highway 24. The campus has three Class-A office towers with nearly 512k SF. Located in downtown Walnut Creek, the center has on-site amenities as well, including three cafés, a 24-Hour Fitness, an ATM and shower facility with locker rooms.