Regardless of anyone’s outlook on the future of the commercial real estate industry, one thing that everyone can agree on is that the pandemic ushered in a seismic change to how people interact with real estate. In today’s workplaces, how you work is as important as where you work. The biggest enabler of that dynamic shift in both worker preferences and the styles that corporations now accept is technology. Advancements in technology over the past two decades, including video conferencing solutions, cloud storage applications, smartphones, and affordable high speed internet have made it easier for people to work remotely, but it was the pandemic that truly tested the practicality of large scale work-from-anywhere initiatives. And they worked. While there is still a healthy debate over whether employee productivity decreases when they work remotely (companies like Salesforce and Disney are convinced that WFH is a productivity killer), I’m convinced that hybrid work is here to stay.
The more pressing question to answer is why would employees want to return to their offices? If it’s not to access the coolest new tech gadget, or to print on a hyper digital printer- what will bring people back into their offices en masse? That’s the big question for real estate owners and managers with properties across the globe. Real Estate is the world’s largest asset class, so the success or failure of this industry has ramifications for the entire global economy. For context, the US commercial real estate market alone is estimated to be north of $20 trillion.
Real estate is cyclical, so most owners have been through downturns in the market before. But this time is different. Unemployment is hovering around all-time lows, and generally speaking the economy is still strong. The softness in the market is not a product of the economy, but rather a change in behavior. And while the economy has remained strong, things are slated to get more challenging as interest rates skyrocket and most experts are predicting a recession later this year.
What had previously worked to attract employees into office buildings may not work now. One way which landlords often improve the appeal of a building is by investing in amenities such as fitness centers, game rooms, and health care clinics. Additionally, they have invested heavily into technology assisted efficiencies including high speed internet, destination dispatch elevators, hands free access control, and Tenant Engagement Apps. These investments helped to increase employee conveniences along with creating much needed efficiencies, but I do not believe that these solutions created a driving force to increase the frequency of employees coming into the office. Corporate occupiers have more negotiating power now than they did pre-pandemic, and they are carefully assessing their options to ensure that the offices they choose to lease will meet their needs and provide their employees with the best possible experience.
Hines
I recently had the privilege of meeting with the Experience Management team at Hines. Hines is one of the largest privately held real estate investment managers in the world. Their company has over $90B of assets under management, over 100M square feet of third-party real estate that they manage, and they have a footprint which extends across 30 countries. Over the 66 years since Hines was founded, they have been consistently recognized as a trailblazer in the industry. Hines’ leadership team has committed to raising the bar and reinventing the meaning of Tenant Experience. The metric they consider is the “Return on Experience” which equates to the value that the in-person and technological advances keep employees coming into the office and engaging with solutions for their livelihood that go well beyond just office life.
While technology plays an important role in Hines’ strategy, it is only part of their solution. They have launched a comprehensive set of initiatives that will set the new standard for Client Experience in the real estate industry. To truly deliver a level of hospitality in commercial real estate that is often only found in a luxury hotel, a holistic strategy is needed which focuses first on the human element, and second (or third) on how technology can serve as a tool to facilitate it. The way in which building staff interacts with and services their tenants are key drivers of tenant satisfaction.
Hines Experience Initiative
To understand the driving force of Hines’ customer focused culture, all that you need to do is listen to a single sentence that the company’s founder, Mr. Gerald Hines, stated back in the early 1970’s, “We are in the service industry, and we better not ever forget that”. That sentiment has been embedded into Hines’ people-first culture. As part of their ongoing commitment to human centricity and client experience, the firm announced several new programs and resources designed to take their best-in-class customer service to new heights. Two of these include:
Hines Experience Academy
Establishing New Hospitality Service Level Standards
To fully understand and appreciate these 2 programs in detail, I was very lucky to be given the guided tour by Hines’ Senior Vice President of Global Client Services – Whitney Burns.
Hines Experience Academy
Life is a journey where the only constant is change. Change often happens gradually, but every once in a while an event can come out of nowhere which flips the entire world on its head. The COVID-19 Pandemic was one of those events. After the pandemic, some companies continued on with the mindset of Business as Usual, but Hines was not one of those companies. They realized that they needed to adapt and transform in step with the world around them. Although placemaking has always been in the DNA and foundation of their company, the pandemic resulted in Hines recognizing that it was critical for their team to be even more purposeful in the way they design and operate their spaces. Their goal is to interact with their tenants and residents on a human level, while challenging themselves to provide better and more meaningful experiences. As Whitney details below, their mission to adapt to these changes and to address this shift in mentality was precisely the reason why they created the Hines Experience Academy.
“The Hines Experience Academy provides curated hospitality training designed to transform our business, allowing us to build and foster a culture of client centricity across the firm and to differentiate our property management and facilities management offerings. We cover both high-level theories and tactical strategies to give teams the tools they need to create memorable customer experiences across all product types. Think of it this way: We have moved beyond just being in the service industry. We consider ourselves to be in the hospitality industry. We believe that it’s more than just taking care of buildings and key contacts. It’s about taking care of every individual. Let’s give our clients the gift of time, curating amenities and services that allow them to be more productive, not just in work but in life. Let’s interact with them in ways that make them feel seen and cared for. We have the opportunity to do so much more than just return to the office. At Hines, we see this as an opportunity to improve their quality of life”.
As the market started to soften and the competition for tenants hit an all-time high, the buzz words which have dominated the marketing collateral and promotional materials of the world’s most prominent real estate companies are Tenant Experience. Technology has become the centerpiece of the Tenant Experience initiatives that these property owners and managers have been championing over the past few years. But as Whitney details below, technology is important to Hines, but it is only one piece of their comprehensive strategy.
“We take a people-first approach both from an employee and a client perspective. We’re not ignoring the tech and apps, don’t get me wrong. We are engaged, invested, testing and trialing. But apps alone don’t make an experience. They’re garbage in – garbage out and without the incredibly talented, empathetic, and high-EQ humans to power the tech and to create the content and connectivity, the apps are useless.
We want to flip the script on the office, making it not a place people ‘have to go’, but a place that adds value and allows them—through services and amenities—to be more productive, not just for work, but for life. We want to support the whole person, not just their work life. I have two young kids, aged 2 and 6. When I walk into the building in the morning, sometimes I feel like I’ve already run a marathon. We need to think about the different personas coming in and out of our assets and how we can best support them holistically. This includes things like onsite eye exams, spa services, TSA precheck, etc. It’s not just about cocktails and charcuterie.
A beautiful building only does so much, and we want to make sure the software (services, human connectivity, etc.) matches the hardware (gorgeous marble, fabulous interiors, functional design) in our assets”.
Setting New Standards
The Forbes Travel Guide is the only independent global ranking system for the hospitality services industry. In addition to their rankings, the publication has been providing insights and perspectives on the luxury hospitality industry since 1958. When people think about the Forbes Travel Guide, they immediately associate this publication with luxury hotels, restaurants, and spas, which is why you may be surprised to learn about their partnership with a commercial real estate company. But while Hines is a global real estate investment, development, and property management company, they view themselves as being in the hospitality industry. It was this unique viewpoint that led Hines to make the decision to become the first commercial real estate company to partner with Forbes Travel Guide to ensure that they were fulfilling their commitment to establish and deliver hospitality level service standards to their clients.
“Forbes Travel Guide is a huge resource to help make sure we have the QA/QC processes in place to not just say we deliver hospitality level service, but to actually make sure we deliver on it. We went straight to the source of some of the world’s most memorable and incredible experiences to create our standards”.
It’s All in the Attitude
What really caught my attention when I met with the Hines’ team was the passion and excitement that they had when detailing their plan to me. It should come as no surprise that a real estate company’s primary motivation is leasing space, but I got the sense from the Hines’ team that even if a building was fully leased up, they would still take the same level of pride in delivering their tenants (which they refer to as clients) with an experience that only Hines can deliver. Hines has pioneered many enhancements in the commercial real estate industry over their 66-year history, and that trend is continuing when it comes to Tenant Experience. They are raising the bar and setting the new standard, and if history is a guide, I anticipate many of the other commercial real estate firms will be watching them closely while enacting similar initiatives of their own.
To learn more about how Hines inspires at its properties visit this link