Office Building Success Depends on People—Not Capital

Business owners nationally are trying a variety of approaches to balance their corporate needs with employee desires, both of which have changed in a post-Covid era. Office owners that invest in a people-first, community-focused approach in their properties have a competitive advantage over those that limit management to the basics of providing a secure, efficient building.

This perspective is based on the eight years of first-hand experience and data accumulated by Hospitality at Work ®, Lowe’s commercial property management subsidiary, since installing its first “Building Host” in a 300,000-square-foot office building in Denver. 

The role of a Building Host

Building Hosts are more proactive than a concierge and equally focused on both the lease signers and their employees. They schedule property events and activities as well as tour prospective tenants and serve as the face of the building. Lowe’s ownership and management of hotels and resorts has allowed it to bring its hospitality experience to the training of its Building Hosts. In our experience, tenant engagement increases tenant satisfaction, which in turn increases occupancy and net operating income.

For several years prior to 2020, office building owners were adopting new strategies including bringing hospitality into management, the addition of communal spaces and the use of prop tech. Institutional owners and managers were starting to spend heavily on areas for collaboration in the form of training rooms, fitness rooms, sport courts, game rooms and central hubs, hoping that tenants would engage with each other and that their buildings would stand apart from competition. 

But when Covid hit, community rooms became dark space on the rent rolls as tenants were less interested in engaging in person. It became harder to justify the salaries of personnel, such as concierges, whose sole role was to gather people together. Many of those positions were eliminated.

In recent tours of office properties, it is striking the amount of money that has been invested in well-designed, beautiful amenities and common areas, and yet few people are using them. These stunning buildings are underwater financially, with high vacancy rates and seemingly no way to rectify the issues, short of selling and reducing the basis for the next owner. Amenities without programming, no matter how well designed, are not going to create demand with prospective tenants.

Looking ahead in 2025, building owners need to recognize that the ideas of shared experiences and human connection have reemerged. After focusing on building out amenities, bringing people back to the office safely and spending on the adoption of engagement apps, it’s time to move beyond hard costs and technology. Owners need to invest in a team-based approach where staff members work together as the face of the property.

A focus on engagement

Engagement proptech is less compelling now that more people are back in the office. Tenants may rely upon a building app for building access, paying for lunch, reserving a room or RSVPing to an event, but they are less likely to scroll through it to see what is happening at the building. 

We review our app analytics frequently, and can see what tenants are clicking on. Tenants report that they are trying to temper screen time and are more inclined to rely upon posted signs, lobby screens or newsletters for information than an app.

This year, owners should expand the concept of “tenant engagement” to simply “engagement”, as it encapsulates the entire building team working together, often not just for existing tenants, but also for prospective tenants and the larger community.

With a full engagement team, a Building Host knows a building’s tenants and can provide the services and programming they desire. An engineer responds quickly to satisfy a workorder request. A leasing agent is available for quick questions and is prepared with space plans, tour dates and costs. A manager keeps vendors and staff on track, delivers reports and billings accurately and in a timely manner.

Owners who don’t have capital to reimagine common areas or add amenity spaces can still make a difference by having the right people in place, at a fraction of the cost. This investment in people is borne out by the facts.

Lowe reviews independent surveys to compare and measure the Hospitality at Work community approach against other institutional owners and managers. It shows that all buildings, even those without amenity spaces, benefit from the Hospitality at Work approach, which is proven to deliver greater tenant satisfaction year-over-year and building occupancies that outperform.

Daisy Gauck is senior vice president of Lowe and a leader of its hospitality-inspired commercial management company, Hospitality at Work.