Government Officials, Building Owners Discuss How To Attract Major Office Tenants
Technological innovation has had a profound impact on property management, and at Bisnow's Property Management and Leasing Forum yesterday, Bozzuto and Vornado executives weighed in on where they see the next disruption. One example that's as ubiquitous in new developments as it is homogeneous in each one: parking garages.
Vornado/Charles E. Smith COO Patrick Tyrell, pictured on the right, called parking garages "shockingly unsophisticated."
"If any of you here run buildings, I guarantee you don’t know what’s going on in your parking garages every day," Patrick said. "There is very little technology today that's really been deployed to advance the parking business."
Patrick said Vornado invested a couple of million dollars last year on cameras and revenue control systems. The investment led to a 12% to 15% rise in parking revenues, and Patrick says he was shocked at the ways they spotted people on the cameras trying to skirt parking fees.
Bozzuto president Stephanie Williams, who sat next to Patrick on the property management panel, talked about integrating its technology services for multifamily residents.
"We work with a number of different technologies, our challenge is getting them all to speak to each other," Stephanie said. "The more there is out there, the harder it is because you want residents to have a single experience when it comes to technology."
Electronic Tenant Solutions COO Aaron O'Neil (left), who moderated the property management panel, was curious to hear how managers overcome the generational divide between Baby Boomers and Millennials. He's not alone in his curiosity.
Akridge SVP Kathy Barnes (middle) said when considering getting buildings LEED certified, brokers often note that the older executives of the tenant companies are usually not as concerned about the sustainability measure.
“They may not be asking for that yet, but the Millennials that are working for them are going to insist on it,” Kathy said. “I think we’re struggling to close that gap.”
Baroo founder Lindsay Hyde, right, said, in the pet servicing business, Millennials and Baby Boomers make up the bulk of their customer base, but the two generations are looking for very different experiences.
"In our business, we see one population that is highly tech-driven, and never wants to talk to our team, they want to see everything via text message and book through our app,” Lindsay said. “And then we have our Boomer residents who really want to have a more customized, personal experience, make a phone call and be able to actually talk to somebody."
The event began with a panel on tax incentives, featuring economic development officials from the Maryland, Virginia and DC governments.
The panelists each discussed ways they incentivize companies to come to their jurisdictions as well as retain the ones already there. Each jurisdiction has standard tax credits they offer on a regular basis, but every so often, a huge company will be considering a move so impactful that governments will create custom, tailored incentives packages. This often leads to high-stakes competition between the districts.
The last big bidding war came when The Advisory Board considered leaving DC, and the District competed with Virginia to land the company's HQ. Moderator Olivia Shay-Byrne from Reed Smith asked DC chief of staff for the deputy mayor of planning and economic development Andrew Trueblood why they ultimately decided to offer the company a $60M package.
“We looked at their forecast for growth, in terms of how many employees they were planning to hire in the time of this lease,” Andrew said. “We said OK that’s fine, if you agree to hire 1,000 DC residents over the course of 10 years, then well give you a tax abatement based on hitting those milestones each year."
Virginia Economic Development Partnership VP Rob McClintock, who lost out to Andrew and the DC government on the Advisory Board HQ, says they also went outside the box in order to try and convince the company to move across the river.
“We felt like it was an uphill battle to get them in Virginia, but we thought we had a chance,” Rob, pictured on the right next to Maryland Department of Commerce's Mark Vulcan, said. “We made what we thought was a very formidable effort. In this case we went toward a custom grant that was going to be very tailored, and would have required the General Assembly to approve it in the next session.”
In a similar way to how governments lure big office tenants to their jurisdictions, owners and brokers also spend a great deal of time trying to attract tenants to fill their buildings.
With increased competition, property tours have become a pivotal time to stand out from the crowd, and the developers and brokers on the leasing panel agreed that not enough attention is paid to this step.
“The tour is basically our point of sale,” WashREIT’s Anthony Chang—pictured on the right next to the moderator, Real Data Management's Scott Finberg—said. “I would say that the market has become a little sloppy at the point of sale, and tours are not what they should be considering the value and the economics involved."
Tishman Speyer’s Andrew Eichberg, middle, said with increased competition, tenants expect more out of a tour than they used to, and owners have had to adjust.
“There are things we used to not do years ago,” Andrew said. “Now we’ll gut a space and, instead of leaving it in a dark, dreary condition and hoping that the tenant prospect has a vision, we’ll dress it up, we’ll paint it white, we’ll add lights and make it a good experience.”
Cushman & Wakefield’s Mark Wooters, left, agreed that giving a quality tour is important, but also stressed the importance of quantity when it comes to bringing prospective tenants into the building.
“On the developer's side of the fence, we all want swings at the plate, how many times can you get tenants to come tour your building,” Mark, seated next to Brandywine's Janet Davis, said. “Having that sort of conversation in the marketplace about your building is a good thing.”