October 2015 — Office Properties Quarterly —
Page 15
Development
N
ot only does preleasing a
building prior to completion
lead to pleased investors and
lenders, but also it is indica-
tive of the level of success
the development will realize.
In today’s market, office real estate
is highly competitive. As the econo-
my continues to rebound, developers
regularly are delivering new office
facilities, and there is no shortage of
supply. It is important that develop-
ers discover in the early stages of a
project whether it will succeed, and
preleasing tenants is the most effec-
tive indicator.
How do developers deliver an office
building that achieves preleasing
success? First, developers must pro-
duce a clear vision for the project,
including what kind of office tenants
to attract and what features will best
suit those needs. Highly efficient
floor plates should be incorporated
into the design to provide flexibil-
ity with the number of tenants and
space needs per tenant that the
building can accommodate.
Employers today often look for
office features that allow them to
perform their work efficiently while
recruiting and retaining top talent. It
is important that technology needs
are considered, as well as features
that attract today’s workforce. Devel-
opers should pay attention to the
latest office trends in order to deliver
space that will entice future tenants.
For example, options that allow
employees flexibility with their
commutes are a big draw for Den-
ver’s workforce. Developers should
consider the building’s proximity to
mass transit, the cost of and amount
of parking that will
be available nearby,
and the inclusion
of bike racks.
Also there are
a number of
energy-efficient
features that will
lead to low operat-
ing expenditures,
which is a huge
draw for office
tenants because it
will help keep rent
rates down. Energy
consumption is
one of the largest drivers of operat-
ing expenses, so delivering an office
facility that meets LEED standards,
has an efficient building envelope
design and uses upgraded energy
components will ensure that the
office operates efficiently for tenants.
Once the building’s concept has
been determined, the right team
must be in place and have a clear
vision of the desired end product. A
strong brokerage partnership that
understands the market and can tar-
get the right audiences is crucial.
Brokerage teams will help find ten-
ants who fit well into the ultimate
vision and culture of the office build-
ing. In today’s development environ-
ment, buildings are intentionally
designed to attract a specific seg-
ment of office tenants, accommodat-
ing the culture and needs of those
office users.
Once the right customers are tar-
geted and engaged, brokers play
the crucial role of interacting with
prospective tenants to secure their
interest in the building and, ulti-
mately, their decision to prelease.
Preleasing is ideal for employ-
ers who are committed to finding a
long-term office space, and brokers
help inform office tenants of the
preleasing benefits. Office tenants
who engage in the early stages of
a development typically have more
flexibility regarding their designated
space within the building and the
features included. Developers can
better deliver office space that meets
employer needs and can provide
perks such as expansion rights and
building-signage rights. In the end,
the building functions better for the
individual tenants at hand.
Still, the work is not over once
tenants have committed; it is the
developer’s responsibility to deliver
a viable office building that meets its
customers’ expectations. Collabora-
tion is the key to a successful rela-
tionship. By discussing the logistics
of space, amenities and finances
with future tenants, office developers
can ensure upfront that the tenants
will be a good fit for the space and
vice versa.
By keeping tenants informed
throughout the design and con-
struction process, the developer can
increase the likelihood of delivering
an office building with which the
customers are happy. Some tenants
will want to be more involved in
decisions than others, but no tenant
should be surprised by any aspect of
the office environment once it comes
time for move in.
A prelease office property inspec-
tion allows customers to see the
space between the time of signing
the prelease and the building’s com-
pletion. During this interim period,
misunderstandings often can arise
if the future tenants are not made
aware of the changes taking place or
provided the opportunity to refresh
their expectations by seeing updates
as the building begins to take shape.
Taking the time to tour the property
with the tenants refreshes their
memories as to what to expect and
reignites their excitement for the
final product.
While preleasing is crucial to a
building’s success in the early stages,
retaining tenants is important for
the longevity of the development. It
is, therefore, important to consider
an office building’s customers dur-
ing every stage of development and
engage regularly. By doing so, devel-
opers can take pride in delivering
successful office buildings within a
competitive market.
s
Kyle Ramstetter
Director of
development,
McWhinney,
Denver
Buildings are
intentionally
designed to attract
a specific segment
of office tenants,
accommodating the
culture and needs of
those office users.
