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Time to Face Facts—Your Lobby Isn’t Cutting it!

Posted by Ann Salas on May 17, 2017
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commercial lobby needs updating

When I first got into this business 18 years ago, the Massachusetts commercial real estate market was white hot. The dot.com industry was reaching a fever pitch and office buildings seemed to fill themselves. Even many of the outlying suburban markets who, in previous years struggled mightily, feasted off the tidal wave that started in Boston and spread in all directions.

The Trickle-Down Effect

Much of this rapid migration was of course a result of the more desirable buildings and markets filling up first, forcing late comers to consider cheaper options further away from the city. It was a trickle-down effect that was price-driven—plain and simple.

Fast forward to today and I still see many building owners with nagging vacancies still waiting for this trickle-down effect to take place. The truth is…it’s not going to—or at least not in the way in which we were once accustomed. While many companies back then were willing to make compromises in quality office space to save money, less are inclined to do so these days. So why is that?

Employee-Centric Decision Making

working millennialsA little more than five years ago these same decision-makers mostly chose their office space based on a combination of two factors: cost and the wants and needs of their executives. Today, however, that focus has shifted to the wants and needs of the employee. As most of us know by now, Millennials are the catalyst to this trend.

In fact studies show that 78% of millennials today view their office space as one of the most important factors when choosing a job. In the suburban office market, we are now seeing company owners increasingly willing to absorb a $5 and even $10/sf rent discrepancy to move their company into a higher quality work environment because they know how important it is to attract strong Gen-Y talent. As one of my clients recently said:

“I am now in the business of wooing Millennials.”

With such flight to quality, many landlords of older generation Class B office product are at a distinct disadvantage. Most mid-level suburban buildings are simply too small to offer the grand marble atrium, on-site cafeteria, and elaborate fitness centers that their Class A brethren can provide. So, how is a landlord to compete? It starts with the lobby….

The Lobby

Obvious as it may seem, first impressions are vital, and no more so than when you are trying to grab the attention of a potential tenant, (one who’s broker might have 10 options to show them on any given day). I can’t tell you how many times I have been on tour when my client has said:

“I can’t keep track of all these buildings anymore because they all look the same.”

lobbyA building’s lobby is the first thing people see when they enter and the last thing they see when they leave. That makes the lobby, (and to a lesser degree it’s common areas), the most important marketing tool a building has to stand out from its competitors. Your broker cannot perform miracles. If it’s been more than 10 years or the words “neglect”, “out of touch” or “stuck in the 90’s” comes to mind when entering your building then it is time for a facelift!

Many commercial building owners assume rehabbing their common areas and lobbies will be very expensive, but below are a few simple and relatively inexpensive cosmetic changes that can have a substantial impact on your building’s appeal.

Rethinking Amenities

Not long ago, building “amenities” meant full service cafeterias, fitness centers, shared conference rooms and large spatial commitments. Many landlords, assume that if they don’t have the extra space they simply can’t offer their tenants added conveniences. Here are some nontraditional ways to work around this.

The following are a few amenities you can offer that require very little space (if any at all):
massage

  • Set up public Wi-Fi in the common areas
  • Engage a drop off and pick up dry-cleaning service
  • Offer complimentary coffee in the lobby in the mornings
  • Have a car detailing service set up in the parking lot once a month
  • Set up picnic tables with a grilling area if green space allows
  • Plan monthly social events for your tenants, (make your own sundaes after lunch or wine tastings in the lobby at 5pm)
  • Bring in a  yoga instructor to offer classes at lunchtime in a vacant suite
  • Have a masseuse come in for 2 hours a week with a signup sheet
  • Hire a food truck to come to the building in the warmer months

In addition to these simple amenities to set yourself apart, you also have to consider the aesthetic value of the building’s lobby and common areas.

Walls/Simple Cosmetics

One of the cheapest upgrades /sf that can be made to a commercial space is simply a fresh coat of paint. You can also add some color with a few pieces of artwork and plants. Don’t forget, lighting can be art as well.

Common Area Seating

lobby seatingWith so many companies opting for open and collaborative work environments, one of the most common complaints we hear from employees is that they feel like they don’t have any privacy. If the space allows, strategically place chairs and small tables throughout the common areas (not just in the lobby) can provide employees with a much needed respite from a sea of noisy cubicles.

Adding a few pieces of modern furniture does not need to be expensive. You can find some well-priced pieces at IKEA (furniture, lighting, lamps, cabinets, bathrooms, kitchens) or something a little more upscale at Design Within Reach (chairs, modern lighting, lamps, tables).

Lighting

There is perhaps no better time to upgrade your common area lighting. Most utility providers are offering tremendous incentives to swap out old incandescent and parabolic fixtures for more modern energy efficient units. These newer lights offer a far greater lifespan while paying for themselves in only a couple of years’ time. Check out mass save for business for more information and resources.

I often find many of my building owners apprehensive about going this route because of their previous experience with energy efficient lighting. Not that long ago, going energy efficient meant compromising with compact fluorescent’s which were ugly to look at and provided a harsh white light that would often take several minutes to reach their maximum brightness. Even when they did, they were noticeably inferior to the lighting that was being replaced.

Today’s LEDs are vastly different. They are brighter, warmer, and come in a variety of cutting-edge configurations. Although more expensive, consider adding in one or two pendant lights at the lobby entrance for dramatic effect, or modern lamps and sconces strategically placed in the common areas.

About the Author

Dean Blackey has been a commercial real estate broker with R.W. Holmes Realty in Wayland, MA since 1999, serving the Metrowest and Greater Boston areas. His expertise encompasses all facets of commercial real estate, including both Tenant and Landlord advisory as well as asset acquisition and disposition for owner/users and investors.

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