Research demonstrates that positive employee experiences can ignite passion, purpose, and strength for individuals, teams, and a company’s overall performance, with employee-centric work cultures coming out on top in the fight for top talent.
With millennials set to make up more than 70% of the workforce by 2025, this employee-centric shift doesn’t come as much of a surprise. Many millennials find a sense of purpose and fulfillment in their careers, blurring the lines between what’s personally and professionally enriching. As such, companies are acting quickly to implement measures geared to attract and retain the very best, impacting all facets of their operations—including real estate decisions.
According to Stanford University, nearly 70% of employees want an in-office component to their work week, with hybrid work arrangements providing a greater ability to collaborate, innovate, and build meaningful culture. The trouble is “status quo” office space no longer serves as a draw for employees to return. Instead, employees are searching to return to highly-amenitized offices in vibrant ecosystems, aiming to improve their work-life balance.
Experiential Real Estate Continues to Outperform
Newly constructed and updated assets containing on-site amenities and activated outdoor space (outdoor terraces, high-end fitness, pickleball, bocce, putting green, etc.), surrounded by eateries, retail, and entertainment, are proving to be ideal. In Nashville alone, we’ve seen newly constructed office buildings delivered from 2020 to 2022 reach 90% occupancy, with absorption also increasing for older buildings infused with capital for renovations, amenity additions, spec suites, and outdoor areas.
Take Downtown Nashville as an example. Home to AllianceBernstein, Amazon, Bridgestone North America, Asurion, HCA, Oracle, CAA, and UBS, to name a few, the area serves as a major commercial hub for the Southeast and Midwest. Boasting the city’s highest walkability score, this submarket, like Midtown in Atlanta or Uptown in Dallas, is filled with numerous restaurants, luxury hotels, shopping, retailers, new office buildings, apartments, and condominiums, providing employees with experiences that transcend their daily workday.
Unique Assets are also Growing in Appeal
Additionally, the uniqueness and experience of an offering serves as an important part of the overall appeal, with adaptive reuse projects, timber design elements, varying floor plate sizes, and distinct curtain wall designs, setting an asset, and therefore the companies within it, apart. Waldo’s in Atlanta, Neuhoff in Nashville, 501 Commerce in Nashville, and T3 in Chicago and Nashville are all examples of this phenomenon—their unique value propositions are not only a bonus when it comes to sustainability, health, and wellness initiatives but an attractive, modern design element that differs significantly from surrounding assets.
However, while the shift to highly-amenitized, newer office space continues, occupiers are no longer solely drawn by the feeling of “new.” Instead, they are focused on “new” with an added emphasis on the neighborhood immediately surrounding a building. Submarkets and micro markets offering walkable attractions and destinations outside of the specific office building (take The Gulch and Wedgewood Houston in Nashville, for example) are sought-after, as they offer an outlet employees often can’t get at home. This neighborhood focus is an added tool to lure employees back to the office.
Occupier Demands are Clear
As we move forward in 2023, occupier demands are quite clear. They’re searching for:
- Assets aligned with their employee-centric mission, supporting their desire to provide their teams with an all-encompassing approach to their day-to-day,
- Spaces that are unique in design and in their ability to be customized, allowing companies to create a space that matches culture and goals,
- Walkable, established, or up-and-coming “neighborhoods” that offer attractive destinations during and after standard work hours.
Whether you are looking to lease your current asset, communicate your asset’s value, or find ways to further preserve value, our agile platform, research-led and creativity-infused, is ready to deliver, capturing opportunities regardless of market conditions.
Robby Davis is Managing Director and Co-Lead of Stream’s Nashville Office Division. With more than 16 years of experience, Davis specializes in landlord office representation and owner and occupier sales, completing more than $2.5 billion in transactions.
Stewart Lyman is Managing Director and Co-Lead of Stream’s Nashville Office Division. Recognized as one of the city’s top brokers, Stewart has completed $1.6 billion in lease transactions totaling more than 6 million square feet on behalf of many top institutional investors.