October 12, 2018
“Amenities Gone Wild.” The title has nothing to do with a series of risqué videos and everything to do with what the Urban Land Institute sees as a trend that needs to be paid close attention by commercial property owners that go to seemingly endless lengths to maintain their competitive edge.
“For decades, the term ‘amenity creep’ has been current in the hospitality industry,” according to ULI’s latest Emerging Trends report. “In the Travel Industry Dictionary (yes, there is such a thing), it is defined as ‘the tendency of hotels to add new perks and features in an effort to attract more clients and respond to competition.’”
Hoteliers aren’t the only ones. ULI quotes executives of a firm that intermediates offshore capital into apartment investments:
“Every year it is something new. We’ve gone from a ‘package room’ to accommodate all-day deliveries, to lockers, to refrigerated spaces for food—both grocery and prepared foods—that need to be kept fresh.”
And ULI reports that the chief strategist for a major office developer cited a continued tenant push for a robust amenities package. State-of-the-art, onsite fitness centers are so last century. Now, tenants want services such as cooking classes and yoga instruction.
Speaking of services, the major services firms are competing for business “by packaging space leasing, managing co-working space, optimizing common-area use, and providing direct tenant services,” according to the Emerging Trends report. “So, just as the industry becomes in some ways more data-driven, the amenities race puts personal service back to the forefront.”
Still, as the amenities race escalates, it’s legitimate to question how much value all that effort really creates. “In an era when concierge service is being offered in apartment buildings, offices, and even retail establishments, real estate in general needs to think about this topic,” says ULI’s report. “We might need to think about the direction and staying power of real estate competition, based upon amenities beyond those typically provided in the past.”
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