Contract documents

September 30, 2024

Introduction

Tenants are the lifeblood of any facility, and without them, there would be no need for the gleaming structures so many businesses, large and small, call home to exist. Facilities and the space they provide are an essential component of the corporate journey; a journey that is more complicated than it was in years past for several reasons, primarily remote work.

Remote work, something employees have sought for decades, became the norm during Covid. Even as the challenge brought by the pandemic eased, the remote model endures, further stressing the need for heightened sensitivity from property owners when it comes to catering to tenant needs.

An essential part of attracting and retaining tenants is understanding their needs and also what causes them to leave. Tenants are the profit centers and in this climate where the power dynamic has shifted toward employees and employers in terms of where the work is done, understanding how to cultivate that relationship is more important than ever.

Reasons Tenants Leave

1. Poor upkeep: How a facility is managed and maintained is the primary reason a tenant wants out. Tenants have a job to do, a business to run, and they need an environment that supports their efforts. Subpar surroundings are distractions that can adversely affect productivity, have a negative impact on employee morale, stagnate growth and ultimately, prompt a move.
2. Outdated amenities: In some instances, and depending on the stage of the business, employers and their staff might spend more time at work than they do at home. When this is the case, the quality of amenities becomes critical. Teams will want state-of-the-art resources that make their lives easier and when they’re not catered to through amenities that meet their needs, they’ll find a location that does.
3. Lack of curb appeal: What goes on outside a facility sets the stage for what happens once tenants get inside. Making sure the lawns and bushes are maintained, the lots are free from trash and receptacles are emptied is one way to put them in the right frame of mind and more importantly, retain their business. Believe it or not, curb appeal matters and one way to ensure a tenant stays is by creating a facility that rises to meet them each time they arrive.
4. Incompetent staffs: Tenants want answers, support, and the comfort that comes from knowing when an issue arises, the facility manager and the assembled staff can address them in a prompt, professional manner. Plain and simple, facilities with questions and a staff incapable of responding are heading toward low occupancy and less than stellar performance: it’s just a matter of time. Conversely, well-run, managed, and maintained facilities, led by competent staffs will always thrive and attract long-term occupants that drive revenues and profits.

Conclusion

Tenants leave for a variety of reasons, and some are beyond the control of property owners. Outgrowing the size of a location, relocating the operation to another city or state, or closing the business altogether are situations that are beyond the purview of the property owner or their facility staff. But in those instances where a property owner, a facility manager, or a staff member can make a difference, it’s incumbent upon each to maximize that opportunity. Even in a remote world, having the right mix of amenities, atmosphere, and intangibles can be enough to lure employees and employers back into the office, back into the facility.

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AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.