Office Features’ Impact on Tenant Premiums

In recent years, office tenants nationwide have downsized their real estate holdings, but certain building features not only retain tenants but also command premium rents. Amenities like roof terraces, sky lounges, outdoor courtyards, and fully equipped fitness centers are driving lease agreements and boosting rental rates. Properties offering these features have leased approximately 23.5 million more square feet than vacated since the pandemic’s onset in 2020, while other top-tier urban properties have seen losses exceeding 50 million square feet.

The highest rent premiums are linked to outdoor spaces, with properties boasting them experiencing the largest rental rate increases compared to those emphasizing different amenities. For instance, buildings with a gym command only a 0.5% rent premium compared to similar properties, while those with fully stocked fitness centers, including locker rooms and showers, see premiums over five times higher.

*Article courtesy of Costar

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