Heartland Real Estate Business
May 28, 2020
By Kristin Hillier
While in the throes of the COVID-19 pandemic, some office owners and managers are getting creative to virtually bring a touch of normalcy to their tenants’ lives.
Accesso, an investment manager and operator of multi-tenant office buildings, has converted its tenant amenity and wellness program, Accesso Club, into a virtual service. The program includes an app featuring wellness coach classes, which offer live and on-demand yoga, meditation and fitness.
Accesso Club’s virtual program seeks to bring a feeling of daily normalcy back into the fold, with virtual access to museums, art exhibitions, concerts and other activities to make isolation more tolerable.
Accesso sends out a bi-weekly newsletter to communicate news with tenants and has devoted a page on its website to supporting local restaurants. Accesso, which is based in Florida but has offices in Chicago and Minneapolis, owns properties such as The Towers at West End, a pair of Class A office towers in St. Louis Park, Minnesota. The company has been extremely active in providing physical amenities as well as events and charitable drives, and despite today’s environment, has continued to look for ways to provide its tenants with resources.
Ariel Bentata, founding and managing partner of investments for Accesso, says his company is in “crisis mode” and working with tenants whenever they request rent relief. But for the most part, only a small portion of Accesso’s rent roll is a concern. “Most of our tenants have good credit and are sizable enough,” says Bentata. “The measures they take internally will enable them to weather this storm.”
In addition to taking amenities online, Accesso is still actively cleaning its buildings and making sure the facilities remain open and operational for those who have essential work.
“There’s a lot of uncertainty as to how long this will take, but the office sector is blessed in that we have long-term contracts and high-credit tenants,” says Bentata. “From that perspective, we’re more insulated than other property types.”
When tenants return to buildings, the most likely change to amenity spaces will be the layout, says Jim Fox, CEO of Chicago-based North Wells Capital, the investment management affiliate of Urban Innovations Ltd. Equipment and seating will need to be farther apart than before — likely the six feet guidelines that have been implemented among the virus outbreak. There may even be time-scheduling software to limit the number of people in a space at one time.
“Cleaning protocols and increased air circulation will be paramount to the successful utilization of these areas,” says Fox. “There’s also a potential, at least in the short term, that tenants will place a lower premium on these amenities due to a shifting perception that they are somewhat less usable.”
Fox recalls that in the wake of the global financial crisis of 2007-2009, most tenants scaled back on the number of private offices in order to reduce the amount of space per worker and lower occupancy costs. That set into motion a decade-long trend of shoehorning more workers into less space.
“There’s little doubt that one of the direct impacts of COVID-19 will be to rethink that trend,” he says. “Decreasing employee density for office space on a macro level, even in modest increments, could have meaningfully positive impact on the demand for office space.”