As office buildings grapple with fluctuating occupancy rates, owners and leasing agents are dealing with some new competition that is prompting creative solutions. Hybrid schedules are now used by 55% of companies, meaning the office competes with the home as much as other office properties.
Enter experience management, JLL’s comprehensive approach to tenant engagement that goes beyond traditional property management to create compelling experiences. The premise is simple: if employees want to come to the office, then tenants won’t want to leave.
“Experience management contributes to landlord value through both indirect and direct opportunities,” says Tyler Kethcart, head of Experience Management at JLL.
Reinventing the Office for the Hybrid Era
The adoption of experience management represents an evolution of office properties in the post-Covid environment. Office occupancy now stands at 51.6%, well below pre-pandemic levels.
The workplace has shifted from a place for individual work to a collaboration hub. Well-appointed meeting spaces, fast wi-fi, quality catering and wellness programs are differentiators that make employees excited to come in.
"What we're doing today with office is where retail was over 10 years ago, having to reinvent itself and make it more of a destination," notes Cynthia Romack, head of revenue for Experience Management. "People are looking for experiences and things they can't get at home—dog daycare, childcare, fitness centers, pharmacies."
JLL’s approach involves deep analysis of employee demographics through geofencing, social media data and in-depth surveys. In one case, this revealed that a tenant’s employees were young professionals without children, although many were planning to start families within three to five years. That prompted the landlord to proactively add childcare facilities ahead of demand, helping the tenant create a workplace that could meet its employees’ evolving needs.
The Retention Payoff
These elevated experiences impact the bottom line through tenant retention.
"The biggest impact on building valuations is the risk of a tenant moving out," Kethcart says. The cost of replacing a tenant far exceeds the investment in keeping them, making retention the most cost-effective strategy.
At Toronto’s Parkway Place, implementing JLL’s experience management program doubled leasing activity and boosted foot traffic by 60% to 70% on peak weekdays, up from roughly 30%. The transformation added a 30,000-square foot amenity center with cafes, a fitness center, a conference center and volleyball and basketball courts. The project turned a “sleepy” suburban asset into a differentiated property.
From Cost Center to Profit Center
Once those compelling experiences are in place, they create opportunities for additional revenue streams. The same amenities that keep tenants happy—conference rooms, event spaces, cafes and bars—can generate income from outside users during underutilized hours.
"If you're in a building that's only 50%, 60% or 70% occupied, the utilization of meeting and event spaces isn't going to be at 100%," Kethcart explains. Opening these spaces to non-tenants during off-peak times generates meaningful income that immediately enhances asset valuation.
As market dynamics fundamentally shift how office buildings create value, buildings must work harder. The buildings that thrive will be those that create experiences employees seek out and tenants refuse to leave behind.
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