Amenities for Commercial Real Estate

April 2016
Business Success
Brought to You By: Randy Elgin

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Worth Reading

You Probably Know to Ask Yourself, “What Do I Want?”
By Mark Manson

Quartz

Mark Manson has a better question. Instead of asking yourself what you want from life (and getting the typical response: happiness, health, respect, and success), ask yourself how much you’re willing to suffer to achieve this. Why? “That [question] seems to be a greater determinant of how our lives turn out,” Manson says. “If you want the benefits of something in life, you have to accept the costs.”

How to Cultivate the Art of Serendipity
By Pagan Kennedy

The New York Times Sunday Review

Serendipity is usually considered “an occasion when someone stumbles upon a discovery or capitalizes on an accident.” In other words, dumb luck. But maybe we can become serendipitous. Asks Kennedy: How do we cultivate the art of finding what we’re not seeking?

Unicorns vs. Donkeys: Your Handy Guide to Distinguishing Who’s Who
By Abhas Gupta

Medium.com

The LTV/CAC ratio is a formula that measures a start-up’s revenue trajectory, its capital needs, and the amount of “irrational exuberance” required of investors. The higher the LTV/CAC ratio, the more efficient a company is at deploying capital and creating value. Gupta offers examples of fabled tech unicorns that began with impressive growth metrics but ultimately wound up as donkeys. Find out why.


LINKS YOU CAN USE
This Month: Creativity in Business

In today’s dynamic marketplace, business owners must possess two key traits: creativity and innovation. Creativity lays the groundwork for business opportunities, and innovation puts ideas into practice. To stimulate these traits, check out the following:

For your business to be creative, you must first be creative. How? Find out here

5 Ways to Boost Creativity in Your Business

Get inspiration from the experts. Four pros provide insight in must-see TED Talks. Watch the videos here.

TED Talks on Creativity in Business

Nurturing creativity can require drastic steps, including shutting out the world. Learn seven ways of avoiding interruptions.

7 Ways To Avoid Interruptions At Work

Many entrepreneurs think they hold the keys to creativity, but find only locked doors. Learn where the keys are hidden and take the quiz to discover if you’re using them.

Learn Where The Keys Are Hidden and Take This Quiz

REAL ESTATE
Building Owners Should Re-examine Their Amenities

A renewed emphasis on amenities is one of the biggest trends in the U.S. commercial real estate industry, as today’s office tenants are seeking features that are as modern as the demographic they appeal to.

Fully equipped and professionally staffed fitness centers are quickly replacing basement corner gyms, and owners are investing more money in health-focused amenities like climbing gyms, spinning rooms, and even dance studios. A key factor driving this trend is the new millennial tenant; today’s savvy real estate owner understands that in order to appeal to this group, buildings must include lifestyle-focused amenities. Some of the amenity trends to look for include:

Transit-oriented developments: A recent PricewaterhouseCoopers report noted that U.S. developers will move their focus from single-purpose buildings toward mixed-use and transit-oriented projects. Expect to see lots of joint venture projects between developers and retailers and lifestyle brands.

It’s about technology: Millennial tenants are impatient and want answers immediately. Offices across the country will begin to embrace technology in a whole new way. Owners may retrieve HVAC controls from property managers, and offer them to tenants through cloud-based software, so they can control their heating, lighting, and Internet remotely.

It’s nice to share: The millennial worker likes freedom and the opportunity for informal information sharing. To attract this worker, owners and property managers are developing common workspaces and central gathering points that combine great wireless connectivity with aesthetics that promote relaxation.


HOT BIZ TRENDS
Tech Is Efficient But Human Interactions Make Us Happy

Tech Interaction Once, going to work meant meetings and lots of work-related interactions; today, there’s been a huge jump in numbers of traditional (non-self-employed) employees who work remotely and connect to the office with technology.

According to GlobalWorkplaceAnalytics.com, the percentage of workers telecommuting has risen 103 percent since 2005. And unlike in an office environment where opportunities for elevator chats and chance meetings abound, telecommuters aren’t likely to exchange ideas over coffee or lunch.

According to a recent article on TechCrunch.com, “The more efficient we get, the less we interact.”

And that may be making us sad and miserable. In her TechCrunch article titled “Why Increased Efficiency Will Make Us Miserable,” Aja Frost has found lots of reasons for concern about technology’s impact on our lives.

Research indicates that micro-interactions with “weak ties” – people we don’t see often or know well – are connected to feelings of happiness and belonging; “when it comes to our happiness, socialization trumps efficiency,” Frost says.

She cites a study by researchers from the University of Chicago in which some subway commuters were asked to talk to the person next to them during their commute. Others were told to “enjoy their solitude.” The result: those who interacted with fellow riders found their commute was more pleasant.

It’s spontaneous human interaction that makes us happy, not pre-planning a Skype session. But there is still a place for technology.

Frost’s solution: balance. Don’t work from home, she suggests; instead, download Workfrom and select a spot with great Wi-Fi and lots of opportunities for human interaction.


WORK/LIFE
Sick of Business Travel? There May Be a Good Reason for That

Tired Traveller While frequent business travel may look glamorous, if it becomes a nonstop activity it might also be making you sick.

As reported in a recent article in the Economist, researchers at the University of Surrey and Linnaeus University have discovered a host of problems resulting from this “darker side of hypermobility.”

The study found that hypermobiles – primarily business travelers – may suffer in three ways: physiologically, psychologically/emotionally, and socially.

Some physiological effects, such as jet lag, are well understood, but others are less obvious, like increased risk of heart attack and stroke. Frequent flyers may also be exposed to higher levels of radiation (not to mention germs), get less exercise, and eat less healthily than their stationary counterparts.

The study also found that business travelers are more prone to stress and loneliness; stress occurs because “time spent traveling will rarely be offset through a reduced workload.” And probably the work will keep piling up while they’re away. Add to this the time away from family and friends, and it’s clear how hypermobility can become a problem.

Business travelers who are apart from their spouses and children for significant periods of time may experience family breakdowns, and/or close friendships may also suffer from extended periods away from home; business travelers often want to spend all their free time with their families after a trip.

But it isn’t all doom and gloom. For the most part, the hypermobile individual is also among the “mobile elite”: they make more money and have better access to quality health care than the general public. And they’re worldly.

Still, the next time you snap another selfie against yet another city skyline, consider its cost. It may be greater than its worth.


REAL ESTATE
How to Capitalize on the Trend toward Urbanization

More than almost any other development affecting the commercial real estate industry in the past several years, the urbanization of North America has probably had the greatest impact. And it will continue to do so for years to come. The industry will need research, strategies, and new approaches to meet – and capitalize on – the challenges.

Defined as a dramatic increase in population throughout cities and towns (as compared to suburban or rural areas), urbanization has been with us for what seems like forever.

In fact, it was the Industrial Revolution of the 18th and 19th centuries that triggered the first wave of urbanization, as manufacturing jobs replaced farm work and workers moved from rural areas into city centers.

Urbanization now

But never has urbanization been more dramatic in terms of speed or scope as in the current decade. And it’s 21st-century demographics that are driving today’s move to city centers. The so-called millennial population (also known as Generation Y and born between 1980 and the 2000s) is the current force behind the urbanization of North America.

Demographers refer to this generational transition as a “tipping point.” This population, of nearly 100 million, desires the benefits of an urban live-work-play environment. Gen Y workers also recognize the economic value and lifestyle perks of a short work commute and more flexible hours.

And this group also has financial clout: according to global consultant Accenture, the U.S. millennial population spends some $600 billion annually, and that number is expected to reach $1 trillion by 2020. They’re also responsible for most of the new tech start-ups in North America.

Strategizing

To sum up: understanding urbanization and millennial needs and wants will help guide strategy through every layer of the North American commercial real estate stack for decades. For commercial real estate owners and developers, this will mean rethinking every aspect of building operations, from property management to leasing processes.

Owners now need to be intensely focused on attracting millennials and creating an environment that appeals to their live-work lifestyle; low vacancy rates will be greatly helped by persuading these future business owners to remain in the building.

The industry may want to conduct extensive market research to anticipate where growth opportunities will bloom, and also examine the landlord profit potential for future lease renewals. Note: Don’t be afraid to leverage this to the fullest.

Finally, take a really good look at potential office space, and visualize what will be necessary for company growth. What will it take to make this office space both efficient and a great work environment? Address amenities for employees, optimal office configuration, and updated technology infrastructure.

Smart landlords will recognize the benefits and potential value of a growing company, and may even decide to offer to incur some of the update and rebuild costs. And note, tenant retention is especially critical during lease renewal time.

The urbanization of North America will affect the industry for some time. Spot the opportunities, and the impact will be positive.

 

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter. This newsletter is not intended to solicit properties currently for sale.
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