IRVINE, CA—Rental rates in office assets within walking distance of retail can achieve a premium price, according to JLL research. We spoke exclusively with Jay Nugent, SVP with JLL, about why proximity to retail translates into higher rents and how landlords can capitalize on this information.

GlobeSt.com: What's the correlation between higher office rents and proximity to retail?

Nugent: It's a simply supply-and-demand issue. More employers want to be closer to retail because it is a benefit for their employees and it can help increase their productivity not having to get in a car and drive. In today's environment, it really helps with employee retention. The more convenient or fun your work environment is, the more likely people will want to do work there.

GlobeSt.com: How are landlords able to command higher rents in areas where retail is within walking distance?

Nugent: When you look at Orange County, you notice two things. First, some of the nicest office buildings tend to be part of retail developments (i.e., Fashion Island, Irvine Spectrum and South Coast Plaza), so therefore many of these assets are considered trophy buildings because of their fit and finish and would look for a rent premium. Second, the current lack of supply on what is available combined with the strong demand gives many of these landlords the ability to push rents.

GlobeSt.com: What can landlords in areas that are not as close to retail do to justify higher rents?

Nugent: The best thing they can do is try to create onsite amenities if possible—things such as a conference center, fitness center, onsite café or perhaps a concierge service that can help bring those amenities to the building. Anything they can do to show they have no answer for lack of walkable amenities will make it less of an issue.

GlobeSt.com: What else can we take away from this data?

Nugent: Orange County is a unique market compared to other large markets in the country since it is without a true central business district or a centralized place to call “downtown.” People have always had to get in their cars to get to amenities here. With the huge growth and successes in urban areas such as San Francisco, New York and even now Downtown L.A. as well as other major markets, Orange County residents crave a little of that “urban city feel.” Although we will never be considered an urban hotspot, people will take what they can get. They want to be located near a strong amenity base that gives them that feel.