CBRE’s recently released 2018 Global Tenant Survey has found that 88 percent of tenants across all property types — including office, retail, and industrial — say that the quality of property management has a strong or very strong impact on decision to renew their lease.
For tenants, renewing a lease at an existing location means greater workplace stability and less cost and disruption resulting from relocation. For investors, higher renewal rates mean higher retention rates and higher overall net operating income.
According to Mark Butcher, managing director of asset services in CBRE’s San Diego office, “In San Diego, we are seeing investors and tenants becoming more focused on property management and its importance to their company’s bottom line. In our region, we find that quality property management enhances the overall tenant experience, improves tenant recruiting, and increases the likelihood of tenant lease renewals, which drives competitive returns for investors.”
The philosophy behind an office’s structure is an increasing concern of the firm’s San Diego investor clients and occupiers, says Butcher. “Transforming what we traditionally referred to as an office into what we now see as a workplace shifts the layout’s purpose to technology, flexibility, wellness, and social amenities.”
Mary Jo Eaton, CBRE’s global president, asset services, says, “As we look to the future of property management and providing exceptional outcomes for our investor clients, we are seeing a greater demand for expanded services that increase tenant engagement and create a destination of choice for employees. When coupled with our world-class property management teams, tech-enabled experience services like CBRE 360 can support these efforts by creating an overall enhanced tenant and employee experience at their properties.”
CBRE says studies show that providing a workplace that meets the expectations of today’s employees improves talent retention. Across all property types, the survey revealed that 87 percent of respondents of respondents say good building management plays an important or very important role in employee retention. When asked to define what constitutes good building management services, the core functions of effective property management—ensuring that building operations run smoothly and are financially efficient—remain of vital importance.
“Responsiveness,” which is defined by the ease of contact and speed of reaction, is the No.1 most-desired trait of great property management, according to the study. This shows that when communications and speed of response are improved, tenants are likely to have more success in employee retention, which could lead to a greater rate of lease renewal for the landlord.