$9 billion was gambled on March Madness brackets... which is basically nothing compared to the $15 trillion of commercial real estate in the U.S.
What is a good tenant engagement strategy actually worth? Consider this: property management is one of the top five reasons cited by tenants unlikely to renew, and three out of the top five factors influencing tenant satisfaction are customer-service/engagement activities (property management, property management communication, and maintenance & engineering). It’s clear that a little high quality tenant engagement can go a long way.
Gambling with this aspect of operating a commercial real estate building is a terrible idea. After all, a commercial office building’s value isn’t its steel and glass and concrete, but rather all of its leases (which you could carry around with you in a folder). And we’re talking about quite a bit of value… the Federal Reserves pegs the number at $15 trillion.
It’s no surprise that organizations like Douglas Emmett are taking tenant engagement seriously. Their recent tenant case study is a creative and interesting example of win win:
Not only is Douglas Emmett producing a video showcasing its work with its tenants, its tenant gets an opportunity to talk about what they do. In turn, Douglas Emmett uses this content on social media.
Historically, tenant engagement often looks like a newsletter, a handbook, some events in the lobby, fire drill practice, and managing hot and cold calls. Today, buildings taking it a step further have incorporated tenant engagement into their sustainability initiatives.
For example, Hines joined the US Department of Energy Better Buildings Challenge to share their best practices on this topic. The HinesGO (Green Office) initiative was launched because employees were asking for it, Hines saw it as an opportunity to lead by example, and Hines deems it important to investors, owners, clients, and tenants. Hines says the benefits include lower OPEX, higher NAV, and better collaboration with tenants.
Kilroy’s tenant engagement strategy is also heavily influenced by its sustainability team: Kilroy aims to engage 100% of their tenants on sustainability initiatives every year, hosts Earth Day and ENERGY STAR Tenant Appreciation events, works closely with tenants who request electric car charging stations (typically initiated by a survey to gauge interest), and is active on social media. One Kilroy building in San Francisco hosted a Tenant Earth Day Twitter Party, which invited tenants to tweet about ways to save energy in their building. This initiative won a BOMA San Francisco Earth Award and was recognized as an industry-leading innovation by GRESB.
These are just three examples of how leading organizations are not gambling with tenant engagement. If you run a building, how do you engage tenants? What has your building done to engage you? Let us know.