Office tenant satisfaction climbs, industrial tenants demand more space, value perceptions increase across medical office space
SAN FRANCISCO, CA--Office tenant satisfaction and perceived value for amount paid continued to increase at year end, according to Kingsley Associates' commercial real estate trends Q4 2014. For the four quarters ending on December 31, 2014, 88.9% of tenants indicated that their overall satisfaction was "good" or "excellent" with respect to their current office space, up .4% from the previous period.
“Particularly in the office sector, all personnel that come into contact with tenants should take note of the importance of those interactions, especially given how high rental rates continue to rise in many markets.”
After factoring in location, building attributes and property management service are the primary criteria for commercial tenants when deciding whether to renew their leases. “Of the factors within a landlord’s control, the service level of property management continues to be a major decision factor for commercial tenants,” says the president of Kingsley Associates, Steve Kingsley. “Particularly in the office sector, all personnel that come into contact with tenants should take note of the importance of those interactions, especially given how high rental rates continue to rise in many markets.”
Focusing on office tenants' reported space usage trends, the percentage of employees who work from home increased in ten of eleven large domestic markets surveyed, with the largest increase occurring in Boston. One in five Boston tenants indicated that more than 25 percent of their employees work from home at least once weekly, up from just 13.4 percent one year ago. Employees of tenants in New York and Miami are less likely to report working from home.
Kingsley Associates’ analysis this quarter also contains findings from retail, industrial, and medical office tenants. Perceived value for amount paid decreased 5.9 percent among industrial tenants and increased 6.4 percent among medical office tenants from 2013 to 2014. When questioned regarding future space needs, 21 percent of industrial tenants anticipate needing more space, a greater percentage than the other commercial property sectors.