SAN DIEGO—In an office environment where new spec buildings seem to be popping up regularly, there's still plenty that landlords of existing space can do to entice tenants to choose them instead, Bingham Construction's CEO Jeff Bingham tells GlobeSt.com. Bingham, who has been in the construction industry for 18 years), says his firm is doing a lot of projects where landlords realize there is a new type of tenant out there and, in order to attract them, they need to make capital improvements. We spoke with Bingham about specific ways landlords can accomplish this and provide capital improvements that get the most bang for their buck.

GlobeSt.com: How can office landlords make their property more attractive to prospective tenants in order to compete with new spec-office landlords?

Bingham: Landlords can improve both the office spaces and the building amenities to compete with new spec-office landlords. In regard to office space, providing more open space areas, including open ceilings, can facilitate collaborative work environments and a larger feel. In addition, tenants are desiring outdoor seating and gathering areas, which can be added to ground-floor offices. Popular building amenities include retail spaces, fitness centers, barbecue and patio areas and recreational areas such as bocce ball, volleyball and basketball courts. In essence, landlords can adapt their properties to the cultures of the types of tenants that they want to attract by creating more usable and functional spaces, both inside and out.

GlobeSt.com: How are landlords changing their view of office space in light of the new type of tenant out there?

Bingham: It comes down to an issue of positioning a particular property for a particular tenant. If a landlord wants to attract younger companies with a predominantly Millennial workforce, then the landlord will try to be more accommodating by providing new amenities. Landlords, in concert with brokers, architects and contractors, are starting to redefine the use of office space as a more of a place in which to spend a lot of time, instead of just between the hours of 8 a.m. and 5 p.m. Landlords are trying to present a more work-life-balance aspect of their properties to potential tenants as opposed to the paradigm that an employee only goes to an office to work a set number of hours a day.

GlobeSt.com: What types of capital improvements are landlords typically making now, and which are the most relevant to today's office tenants?

Bingham: The most relevant improvements are those which allow the employee to stay at the property the entire time he or she is at work. These would include outdoor seating areas, accessibility to food (either through on-site retail eating establishments or access to catering), recreational opportunities such as a gym and access to valet services such as car washes, laundry or dry cleaning. Keeping employees close to the workplace throughout the work day not only improves productivity, but also reduces carbon emissions caused by the employee traveling off site during business hours.

GlobeSt.com: What else should our readers know about this topic?

Bingham: It's important to note that with these added amenities come added costs. Most high-rise office buildings were not originally built with open floor plans in mind. In regard to office space, creating open ceiling areas may require the relocation of air conditioning units, electrical and plumbing trunk lines and fire-life safety components. Per building codes, most open, metal deck structures must have sprayed fire-proofing applied in a uniform manner, free of voids or spalling. In addition, fire sprinklers must be installed upright, facing the deck, which can detract from the open-ceiling aesthetic. Providing polished or decorative concrete floors can expose and/or magnify surface imperfections in the concrete including cracks and pitting caused by multiple generations of previous tenant improvement build-outs. Reconfiguring an existing office space in this manner could add anywhere from $5 to $15 per rentable square foot or more, depending on the type of renovations required in relation to existing building utilities. Exterior site improvements can be impacted by such things as existing structural footings, unsuitable material, buried high-voltage electrical lines and irrigation lines. Often, the building shell and site as-builts don't necessarily reflect elements that have been added to the site since the building was originally constructed. This can lead to extensive additional costs to have to redesign new amenity features to accommodate existing building elements, or vice versa.

GlobeSt.com: How can office landlords make their property more attractive to prospective tenants in order to compete with new spec-office landlords?

GlobeSt.com: How are landlords changing their view of office space in light of the new type of tenant out there?

GlobeSt.com: What types of capital improvements are landlords typically making now, and which are the most relevant to today's office tenants?

GlobeSt.com: What else should our readers know about this topic?

Instant Insights /

Upping the Appeal of Existing Office Properties

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