Ivanhoé Cambridge's Tenant-First Approach to Offices?

 Commercial Observer reports on why Ivanhoé Cambridge views office occupants as guests:

International real estate firm Ivanhoé Cambridge takes a tenant-focused, satisfaction-driven and very personal approach to the office sector.

Learning from hospitality

The Canada-based firm takes a page from the hospitality playbook. Just as hotels compete daily to provide the finest in guest satisfaction, Ivanhoé Cambridge creates seemingly bespoke experiences via workspace amenities designed to encourage personal interactions with a focus on quality, and where details matter.

“Office buildings are evolving. In the future, people will need a reason to be engaged by their building,” said Jonathan Pearce, executive vice president of leasing and development for Ivanhoé Cambridge.

Pearce noted that in the wake of the pandemic, office tenants expect a more personal, curated experience than in the past, reasoning that if they have to leave the comforts of their home office, they need to have access to better amenities at the office to make it worth it.

“Tenant experience is not a buzzword — it’s mission critical,” Pearce said.   

Wellness as a Service

“People view the office as an attraction and retention tool,” said Pearce. “We view our tenants as partners. Our job is to listen, and then to create inspiring and intentional environments that help them meet their No. 1 need — to attract and retain high-quality talent. We need to bring the human piece to the puzzle.”

Ivanhoé Cambridge views its handling of workspaces as promoting wellness in several different ways. Workspaces serve as a catalyst for bringing people together by providing a variety of indoor-outdoor spaces well suited for collaboration. From parks to food halls to lobbies, there is also flexibility in where an occupant may choose to work. And by bundling services in a tenant experience app like fitness class bookings, concierge services, and order-ahead functionalities, it returns time to tenants, helping foster their productivity.

One of Ivanhoé Cambridge’s longtime partners in this sort of endeavor is the Houston-based real estate company Hines. They have partnered up for over 18 years, creating memorable, city-defining properties, and Ivanhoé Cambridge recently selected Hines to manage many of its U.S. office assets.  

John Mooz, a senior managing director at Hines, reinforces the importance of a hospitality mindset for office landlords.

“Tenants continue to express a strong desire to bring employees back to the office to revive company culture and innovative thinking,” Mooz said. “To do this successfully, landlords must provide an amenity-rich, hospitality-forward experience that provides a productive, cutting-edge collaborative atmosphere that employees cannot generate at home.”

Data drives progress

Ivanhoé Cambridge is a longtime user of tenant experience apps like VTS Rise, which facilitates every aspect of tenant engagement from leasing to everyday operations such as accessing the building, reserving conference rooms, or booking a parking spot. By following the tenant life cycle through the app, the company gains insight into tenant patterns and provides a customized experience.

“Seeing the success of VTS Rise across early buildings during the pandemic made it an easy decision to onboard almost our entire US office portfolio. The data we get back is unique and helps us be a better landlord for our tenant partners,” said Pearce.

Use of the app, including the multitude of data the company can receive and process from their tenant users, allows for continuous dialogue and thus improvement in ensuring that the company can meet new and revised tenant expectations as quickly as those expectations may change. 

Nick Romito, CEO of VTS, sees firsthand the need to cater to shifting tenant expectations, and believes that Ivanhoé Cambridge has just the right formula to ensure tenant satisfaction during rapidly changing times.

“Innovative landlords such as Ivanhoé Cambridge see the value in tenant experience technology for providing their occupants with a modern, user-friendly environment, making their properties a destination that tenants want to come to while creating the most seamless experience possible,” Romito said.

Aligning place with purpose

“Employers are redefining the purpose and vision of the office,” said François Lacoursière, a senior vice president of innovation for Ivanhoé Cambridge. “We are listening to them and trying new things to quickly refine our approach in ways that could scale across the portfolio. Our spaces need to be flexible and pilot-proof, as we are writing the story as we go. This is how we will continue to improve and to support our customers – it is not one-size-fits-all.”

The success of Ivanhoé Cambridge’s tenant-first approach is apparent at its properties, where it is rolling out innovation. 

After launching VTS Rise in Chicago’s River Point, more people were using the app during the peak of the pandemic than there were people in the building. It was a way for tenants to virtually connect to their building experience even as they worked from home – and has been a great tool in welcoming them back to the office with on-site tenant engagement activities. The company’s new CIBC SQUARE in Toronto offers high-quality amenities like a 1-acre park built over a railway and a curated food hall. A community manager activates the spaces for a warm welcome and a tailored experience for tenants, like the curated move-in playlist on the app that greets them their first week. 

Creative offices like The Stack Deep Ellum in Dallas provide a completely touchless experience, from entry to parking to the top amenity space that includes a terrace and a roll-up glass door fitness center.

Ivanhoé Cambridge’s Place Ville Marie office complex in Montreal underwent a transformation to give the community a fully curated food hall and an outdoor plaza with year-round cultural programming. The property also houses unique tenant amenities like an on-site and digital concierge service to remove daily pain points, and Ivanhoé Cambridge’s first flexible office solution, powered by WeWork, to meet the growing tenant demand for flexibility and collaboration spaces. 

The company is currently testing other new concepts as part of a comprehensive smart building strategy at 10 & 120 S. Riverside in Chicago, focusing on meeting market demand with an improved tenant-amenity suite.

With its ability to collect data from tenants and their employees via an app as well as through surveys, the company is able to shape its offerings based on this robust partner data, virtually ensuring client satisfaction by steering its planning based on its tenants’ feedback loop.

“At Ivanhoé Cambridge, we want to deliver inspiring and flexible spaces to our customers that inspire collaboration, and give their employees a different experience than they might have at home or elsewhere,” Pearce said. “All of our innovative efforts serve to make our customers happier, and lead to them being our long-time partners. That makes it all worth the effort.”

I have to hand it to Jonathan Pearce, executive vice president of leasing and development for Ivanhoé Cambridge, he's a great at his job and really knows how to sell the "renewed" office experience.

A couple of weeks ago, I discussed how US office buildings are facing a $1.1 trillion obsolescence hurdle.  

In short, as tenants increasingly look to lower their carbon footprint, they're taking note of the buildings they're leasing and the ones that aren't up to par, well, they'll see significant drops in their appraisal values.

Today, I want to talk about another aspect of offices, the "back-to-the office" experience following the pandemic.

As more and more employers are slowly bringing back their employees to the office, it's a fair thing to ask them: exactly what are you bringing your employees back to?

The same old boring, cold, dusty, antiquated office everyone hates coming to?

In other words, what's in it for employees? Better culture and collaboration?

That can only take you so far. Two years plus of working from home has changed everyone's mentality about work-life balance and what ultimately counts.

As one C-suite executive put it me: "Most of our employees don't want to come back to the office. They're used to working from home and the thought of commuting 30 to 45 minutes each way just doesn't appeal to them. It's a total waste of time. Not to mention everyone is anxious about returning to the office."

It's a fair point, something all C-suite executives are struggling with these days.

There are also shifting preferences based on demographics, with older employees more comfortable working from home and younger ones more keen on returning to the office, going out for lunch and grabbing drinks after work. 

But some younger employees are just fine working from home just like some older employees want to return to the office.

It's a bit all over the map but clearly offices have to change and the infrastructure which people use to commute to the office has to change.

Most people just don't want to deal with the hassle, extra cost and waste of time associated with commuting. They hate it.

What else? Once at the office, they don't want to waste ten minutes waiting for an elevator to take them up to their floor, sit on uncomfortable chairs that gives them backaches, stare at dusty computer screens, breathe stale air, eat crappy and overpriced meals at some lame food court, freeze to death in winter and die of heat in the summer because they can't properly regulate the temperature at work.

Let's face it, nothing beats the comforts of our own home, we can take breaks and lounge on the couch or on our bed, exercise when we want, eat properly at a fraction of the cost, etc.

Where am I going with this?

Ivanhoé Cambridge's tenant-first, more personal, curated, satisfaction-driven experience at the office isn't a "nice to have" in the post-pandemic world. For me, it's a "MUST HAVE or else we're dead" approach.

And I mean that. Now more than ever, in real estate and other asset classes, either you adapt and innovate, really put your tenants and clients first, or you'll pay a hefty price.

Risk departments across pensions are good at measuring some risks, bad at measuring others.

Like what? How do you measure the risk of terrible managers at all levels of your organization? How do you measure the risk of lack of diversity and inclusion? How do you measure the risk of obsolescence of your real estate and other assets?

Some risks are easier to measure and comprehend, others not so much until reality hits you in the face.

All this to say, Ivanhoé Cambridge's tenant-focused, satisfaction-driven and very personal approach to the office sector is the only path forward and those that don't follow suit will face the biggest risk of all, the risk of irrelevance.

Hines is managing many of its US office assets and it's an excellent strategic partner to implement and build on this approach. 

Lastly, I'm not sure what lies ahead for the future of offices. I think hybrid, more flexible work is here to stay and this will create new opportunities for employees and employers.

You're already seeing it, online ads which specifically state "can be located across the country and work remotely."

With talent wars heating up, you need to offer your employees flexibility and an office that entices them to want to come in an enjoy the experience.

Alright, let me wrap it up there.

If you have your own views on what the future of the office should be, let me know.

Before I forget, the Toronto CFA Society asked me to plug their annual pension conference which is taking place next week.

Please go here and register for this event before April 10. 

The event is a webinar which will take place over two days and is featuring four interesting sessions:

Session 1: Path to Net Zero

Session 2: Is China Still Investable?

Session 3: Should Canadian Pension Funds continue to reduce their Canadian equity allocations? Who Should care? (featuring Daniel Brosseau, Co-Founder, LetkoBrosseau)

Session 4: CIO Panel (featuring  Aaron Bennett, CIO of University Pension Plan Ontario and Asif Haque, CIO of CAAT Pension Plan)

Once again, please go here and register for this event before April 10. 

Below, Christoph Magnussen shares his personal ideas on the future of the office. Take the time to watch this, he raises a lot of good points. 

Also, as of today, BCI moved into phase 4 of its Return-to-Office plan. This marks the transition of all BCIers coming back to their Victoria and Vancouver offices. 

You can watch senior managers welcoming back all BCIers on LinkedIn here. 

Welcome back to the office, BCIers, hope you enjoy being back with your colleagues again.