5 Steps to Attract Tech Tenants

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The United States accounts for $1.6 trillion of the global tech industry, which makes it the number one contributor in the world. It’s expanding at about twice the rate of overall job growth in America. Most importantly, it was responsible for nearly 20% of major office leasing activity in the past three years. Office owners who can attract high-quality tech tenants will have a competitive advantage in today’s leasing market.

There are five important factors when tailoring a building to attract tech tenants:

1) Install Fiber-Optic Internet Connection

Fiber-optic cables are essential for tech businesses. They do not suffer the same signal disruption experienced by copper lines. They also outperform significant cable internet speeds. The average cable speed in the U.S. is about 12Mbps. Fiber optic speed can be as much as 20 times faster than 50Mbps broadband. Faster speeds provide better access to data and applications stored in the cloud, important for apps, hosting, and more. Additionally, Fiber internet connectivity is significantly more reliable than its copper counterpart. Glass fibers are much stronger than copper.

Fiber has been found to increase the value of physical real estate by an average of 3.1%.

The installation cost is a function of fiber count and building square footage. On average, it’s anywhere from $1-$6 per foot.

2) Offer Amenity Packages

A 2018 Hqo survey shows 62% of tenants value fitness and wellness offerings more than other amenities. Common fitness and wellness offerings include onsite gyms, nutritionists, and yoga and spin classes. In addition to fitness and wellness amenities, tenants also value food incentives, like discounts to local lunch spots. Additionally, bike lockers, showers, gyms, common eating spaces, standing desks, soft seating areas, and Wi-Fi lounges have proven especially popular with tech tenants.

Google’s corporate offices are an extreme example of a loaded amenity package. Their headquarters boasts onsite gyms and free workout classes. Their employees receive three free meals per day, complementary massages from trained therapists, and discounts to local museums and events.

3) Create Dynamic Floor Plans

Interiors are as important to tech tenants as the neighborhoods they reside in. High ceilings, open floor plans, wood floors, exposed brick, glass, and stained concrete are all in high demand. However, tenants are beginning to seek floor plans that include glass-walled conference rooms that offer privacy.

Senior VP of Tenant Representation Services at Dunhill Partners West in San Francisco, Benjamin Osgood explained, “While open floor plans remain a favorite of tech companies, there’s still a need for private space. Companies are realizing that the demand for more meeting rooms is still there. Being totally open doesn’t work,”

4) Implement 24/7 Security and Accessibility

Tech employees typically work long days and keep atypical schedules. Buildings and offices need to allow access at all hours. A doorman and 24-hour security is a bonus.

5) Create a Community

Coworking spaces like WeWork have proven successful at attracting techies and startups. In addition to upbeat music, trendy common areas, and cold brew on tap, tenants can engage in social events on site. These little details foster a sense of community among tenants.

Mark Rosenbaum, Professor of Retail Marketing at Northern Illinois University says, “Communities that are developed in third places like gyms and coffee shops often provide social and emotional support equal to or stronger than family ties.”

Create environments that mimic this type of support, and your building will be unbeatable.

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ABOUT THE AUTHOR
Tyler is the Founder & CEO of Bullpen. Before becoming obsessed with proptech, Tyler built a commercial real estate consulting practice that advised some of the largest institutional investment firms on their most important projects. Tyler uses the Bullpen blog to share ideas and resources with readers who will shape the future of commercial real estate.

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