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{Funnelist Market Watch} Amenities or Necessities?

05/13/2014
jeremy neuer, cbre, neuerspace, commercial real estate blog, cre news

The average age of buildings in Northern and Central New Jersey is thirty years old.  That’s the average!  With many older buildings facing the possibility of becoming functionally obsolete, landlords are investing capital to update the building systems and refresh the common areas. 

However, a new lobby and new bathroom finishes aren’t enough to win tenants in this competitive market.  Amenities are driving many decisions as companies are focused on their workforce and the experience while at work.

Google is well known for feeding their employees endless snacks and drinks and creating a work environment that encourages people to stay in the office rather than race home.  With upgraded cafeterias, fitness centers, and building common conference rooms, landlords are able to show prospective tenants that they are committed to maintaining older buildings as top of the market.

For example, the chart below outlines the amenities at several fully leased buildings in the market.

 400 campus drive, 902 canegie center west, 400 crossing boulevard, 500 frank w burr, 1 university square drive, 111 wood avenue south,1 giralda famrs, 400 somerset corporate 

Buildings fetching the highest rents in the market also offer more services such as a concierge instead of a security guard, shuttle service to the airport and/or local shopping, and tenant events like popcorn Friday. 

 502 carnegie center, 51 harborside financial, 51 john f kennedy parkway, 300 kimball drive, 101 wood avenue south, 1 riverfront plaza, 300 tice boulevard, 525 washington boulevard, 194 wood avenue south 

Smart, aggressive landlords will continue to try and find the differentiating factor for their buildings.  We are starting to see less money spent on lobbies and bathrooms and more money put in to amenities that benefit the tenant experience, a trend that I am confident will continue.

 

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By: Jeremy Neuer

Senior Vice President | CBRE

Jeremy Neuer is a Senior Vice President with CBRE in the East Brunswick, NJ office. He specializes in office leasing throughout New Jersey and also represents several large corporations on a national basis.

Email Jeremy: jeremy.neuer@cbre.com

Follow Jeremy on Twitter: @JNeuer19

Follow CBRE NJ on Twitter: @CBRENewJersey

Read more of Jeremy's blog posts on NeuerSpace

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