Thought Leaders Agree: Offices Need to ‘Do Better’

Office landlords have always competed with other office landlords.

But in a post-COVID world, “Suddenly we’re all competing with home ... and everything else that's going on outside of home and the office,” said Clint Osteen, senior director of IT for Granite Properties at CREtech New York in September. In response to this shift, he said, the office sector has subtly begun considering end-users not “tenants” but “customers.” Workplace operations are functioning more like the hospitality sector.

And that's a good thing, according to Mag Partners’ Founder and CEO MaryAnne Gilmartin. The return-to-office struggle represents a much-needed reset, she said at the Sept. 19-20 event.

“Forcing people to come into the office five days a week is not going to create the new work environment for the 21st century," Gilmartin said. "It’s just not going to do it. Instead of counting the turnstile turns to figure out whether people are coming back to work or not, can’t we do better?"

“The days of having lined-up cubicles and that’s where you're going to work — that’s not the future,” echoed Scott Rechler, chairman and CEO of RXR. These ideas aren't just a result of post-pandemic reticence to return to the office, he added: they represent a sea change which is swelling now more than ever.

Instead, the office should be a place for people “to do what they can’t do at home,” said Michael Przytula, Accenture’s managing director of intelligent and digital workplaces. “People don't want to leave their home to go to an office from the '80s,” he said. Employers need to provide “a place where workers can consume services or capabilities that allow them to build things or perform certain functions that they just can’t do remotely.”

As such, facilities management, IT support and security departments have trended toward a background existence at Accenture’s more than 200 offices worldwide, Przytula explained. Instead, the professional services giant now features roles more akin to the concierge service at a hotel. “If something goes wrong, someone’s there to help,” he said. “And you don’t have to go looking for it; it comes to you.” The roles “serve as an access point for the employee; to be there to help them get done whatever it is that they need to get done.”

“It all comes back to the thesis that the workplace is a consumer product now,” said Corinne Murray, founder of workplace consultancy Agate. Putting workers at the forefront is the solution, panelists agreed, and to do that, office owners should take cues from hospitality.

In that vein, the largest commercial landlord in Manhattan, SL Green Realty, “has had to completely reimagine the role of the office landlord in New York and around the country,” according to the firm’s president, Andrew Mathias. “And that’s through viewing office buildings as much more of a source of hospitality.”

As a landlord, that can mean providing on-demand, building-wide amenities, for example. “A lot of times, we see huge boardrooms in [tenants’] spaces, and they always tell us they use those boardrooms maybe four times a year,” Mathias said. In those cases, he said, “we would build a beautiful, fully serviced boardroom for the building that’s nicer than the boardrooms most tenants would build in their own space.” Tenants mostly appreciate that kind of efficiency, he said. They don’t need to lease as much space, and what they get is better.

Environment plays a role, too. Gone are the days of dreary cubicles, Mathias continued. “In order to entice people back to the office, because they do need to be enticed,” he said, “tenants want food, fitness and social options. They want natural light. They want their employees to feel healthy and like it’s less of a job and more of an experience.”

These are very low-tech concepts for a tech event, Osteen conceded. But technology alone doesn't draw workers back, he said. "So Granite, which has always leaned toward hospitality, is now in the business of placemaking.”

The “ability to provide an environment” is how Related Companies hits its higher-than-average office occupancy rate of 79%, explained Joe Rich, an executive vice president at the company. “Our complexes are in locations with easy commutes and great amenities on the premises — whether that’s childcare, healthcare, fitness or a hotel. All of those things play into what we’re calling a ‘lifestyle office.’”

Listening to tenants’ demands, SL Green Realty has put a huge focus on food.

“New York City is a city very much defined by food,” Mathias said. “If you look at something like 11 Madison Avenue, which is headquarters to Credit Suisse and Sony, among others, people know it far more for Eleven Madison Park, the restaurant.” At some of the landlords’ other office locations, such as One Vanderbilt, it’s the sushi bars and food halls that “give tenants a sort of calling card,” Mathias said. “Not to mention the fact that these places are big contributors to the buildings’ bottom lines.”

There’s nothing like food and drink to bring people together, agreed Don Watson, SVP of real estate and facilities management at software development conglomerate Oracle. Watson explained that he’s been traveling to Oracle campuses, which number in the hundreds across as many countries, “And what I’m seeing is that employees who are coming back are early in their career, and they are coming for mentoring and training and to meet with their managers.

"But there's also a huge social aspect of it that we're seeing,” he added. Judging by feedback and other engagement measures, he said that coffee bars, cafés and cafeterias have been some of the most crucial elements of Oracle’s office real estate. “When you see where there's bursts of activity, it’s always in that collaboration type of space.”