For the past several years, BOMA International has taken the lead in the research, analysis, and dissemination of research pertaining to tenant satisfaction and retention. In 1998, BOMA and the Urban Land Institute, Washington, D.C., partnered the publication “What Office Tenants Want,” which was followed up soon thereafter by a strategic mapping study that explored the factors behind what attracts a tenant to a particular office location – and, as important, what prompts tenants to stay and renew their lease.
One factor identified from this research was the fact that many tenants were seeking office space that was able to meet the changing demands of their businesses and the performance of their workplace. More specifically, tenants indicated that space flexibility or space that could easily accommodate downsizing or upsizing was of importance.
To more fully examine the role space flexibility plays in tenants’ satisfaction BOMA embarked on some groundbreaking research in 2001. The crux of the research is that if a tenant is provided with flexible space at the beginning of their lease term that this will lead to increased workplace performance and, consequently, result in greater tenant satisfaction and better performing office buildings, as measured by Net Operating Income (NOI).
Research was conducted through two separate survey methodologies. A mailed survey, distributed to 5,000 owners and managers, was designed to explore their attitudes and impressions on workplace performance. The second survey involved comprehensive, in-depth telephone surveys of corporate leasing professionals working exclusively for a tenant company.
The owner/manager survey indicated that 87 percent of this group feels that there was a correlation between flexibility and tenant retention, but only two out of five feel that there is a strong correlation. Owners/managers indicated they provide “added value” to space flexibility through the provision of tenant inducements (TIs).
One of the striking differences between the tenant survey and the owner/manager survey involved “Cost of Space.” Owners/managers indicated that cost of space and location ranks higher than space flexibility as a key determinate of tenant satisfaction. This is in direct contrast to the findings from the tenant survey. Tenants, on the other hand, ranked cost of space as very low on a scale of factors having an impact on building satisfaction.
One interesting finding discovered in BOMA’s tenant telephone survey was that “service” and the responsiveness of the building management was of paramount importance when they evaluated their workplace performance and, ultimately, their decision to renew their lease. Ranked in order are the factors that tenants feel are the most important determinants of retention:
1. The quality of building management.
2. Property management knows the tenants needs.
3 Property management is proactive.
4. Tenant space helps the tenant to be profitable.
5. Space meets business needs.
6. Space has up-to-date technology infrastructure.
7. Property management is trustworthy.
8. Floor plan layout works for the tenant.
Survey research on the subject of financial performance and workplace performance is currently under way, and complete results of BOMA’s research on this subject will be ready by March 2002. For more information on this topic, please contact Scott MacIntosh, director of research, at BOMA International via e-mail (email@example.com).