Larger Amenity Allocation = Smaller Payroll Expenses

Strong interest in Class-A office space across DFW has triggered an amenities arms race, making developers and investors devote serious square footage and capital to amenities in their office buildings, new and old. And shelling out for cool space can mean paying significantly less.

“New developments are allocating larger footprints [to amenities]. The amount of square footage that they are allocating to these lounges and amenities is drastically higher than anybody would have ever thought,” CBRE Vice President Tommy Nelson said.

Office leasing professionals said high performance in the Dallas-Fort Worth economy is increasing companies' workloads, driving them to bolster their teams. That is boosting interest in Class-A space that will appeal to potential hires.

“There is a definite flight to quality that is happening within our market. The ability to attract and retain employees is critical … [companies] are looking to recruit top-tier talent and in order to recruit that top-tier talent, you need quality space,” JLL Vice President, Tenant Representation Group Conor McCarthy said.

The amenities arms race has become so important to recruitment and retainment that having the right amenity mix can have a significant impact on a company’s bottom line.

“People will go to companies that have cool space and/or the best amenities. I have multiple tenants that tell me, ‘We are able to hire and retain people at a fraction of what they would make elsewhere because our space is awesome and they love this building,’” Nelson said.

One tenant told Nelson it was able to retain employees for 25% less than what other companies would pay because the employees love the space so much. 

This kind of success has companies throwing money at amenities hand-over-fist. But what are people paying top dollar for? What is the winning mix within a property?

Leasing and design professionals seem to agree on five things: big lounges, some sort of green space, big fitness facilities, abundant food options and walkability.

Nelson said competitive fitness centers are moving from 800 SF to as big as 3,500 SF with lockers and full showers. Meeting rooms cannot just be meeting rooms with seats for eight; they must be boardrooms capable of hosting large tenants' all-hands-on-deck meetings.

McCarthy points to Legacy West, the Urban Center in Las Colinas, The Star and Wade Park  in Frisco as great examples of successful amenity structures invoking the descriptor of "live-work-play."

Lauckgroup co-owner and principal of design Brigitte Preston sums up the amenity rush as a focus on employee health and mindfulness. Many clients have been asking Lauckgroup to build meditation rooms, and one client has commissioned a full-on tatami room with the Japanese straw-mat flooring. Preston believes amenities related to the well-being of employees will be the game-changers for companies trying to attract talent. 

“I think mindfulness, wellness, access to the outside, I think all the spaces that go with that trend are going to be big,” Preston said.