As many work from home, office landlords roll out entertainment to entice tenants
As landlords struggle to get people back into office buildings that emptied during the pandemic, some are turning to entertainment and other enticements such as yoga classes to woo wary workers.
At the Water Garden office complex in Santa Monica, a dance troupe has taken up residence and puts on free performances and classes for kids. Flower arranging classes are packed and the weekly tenants-only comedy show after work is a hot ticket. Musical performances by local artists are a lunchtime draw.
Farmers markets, concerts, art shows and other attractions for office tenants aren't completely new, but they have taken on urgency as landlords and executives of companies occupying their buildings strive to get workers enthused about showing up. Some property owners are hiring "tenant experience managers."
In most commercial buildings, only about half the workers show up at their offices on weekdays, key-card swipes reveal. Office leasing is also weak: Space rentals declined again last quarter to bring the overall total of unleased space in Los Angeles County to nearly 20%, well above the 12% rate before the pandemic.
To get workers in the office, "you need to find new ways to engage people," said Bess Wyrick, head of programming at the Water Garden for property manager CBRE.
With daily office attendance not mandatory at many companies, "It's no longer about trying to create a work-lifestyle balance," she said. "It's about creating a hybrid workplace where people are excited to come."
Hybrid work patterns have spread widely since the pandemic shutdown of 2020. As companies bring workers back together, many have reduced the number of days their employees are required to be in the office, creating flexible combinations of office days and remote work days.
Cosmetic company L'Oréal Group demands that employees work in the office at least three times a week, on days of their choosing. L’Oréal sweetens the office experience with such comforts as a fitness center, restaurant, juice cafe and a cabana-like bar that serves coffee drinks and, depending on the occasion, alcohol.
Disney Chief Executive Bob Iger recently announced that employees working from home must return to the office Monday through Thursday starting March 1. Fridays are typically the least populated days for offices, research shows, and while most employees toil at home that day, a few companies are taking them off the business calendar altogether and working 32 hours a week.
Landlords are also keen to make offices appealing so tenants will keep renting space in their buildings.
The campus-like Water Garden was a dreary place after being devoid of occupants during the worst of the pandemic, Wyrick said. While they were gone, nearby businesses and restaurants nearby failed or left for other reasons.
"The area was a ghost town," she said.
Wyrick's first move was to arrange live performances by local musicians and dancers in the courtyard. Among the complex's biggest tenants are retailer Amazon and technology firm Oracle.
One of Wyrick's goals was to make the Water Garden a place people wanted to visit, including neighbors who could walk over to take in a mid-day concert or see pieces by local artists displayed and for sale in the lobbies of the four office buildings. Getting a buzz of life into the campus could help address a common chicken-and-egg complaint about going back to the office — people don't want to go there if other people aren't around.
Paying performers to appear, serving free food to tenants at holiday soirees and other planned events are part of a marketing strategy to get the property occupied, she said.
"We will lose money in the beginning," she said, "but it drives people to put roots in the space."
The key measure of success is leasing, and Water Garden has added tenants over the past 12 months. Its 1.4 million square feet of rental space is 86% leased, up from 72% leased a year ago, Wyrick said.
One of her leaps to enliven the place was to agree to an unusually short lease with a well-known dance company for an expansive first-floor space last occupied by a furniture showroom. In exchange, Jacob Jonas The Company agreed to engage with other tenants through free classes, performances and other events.
The nonprofit dance company has performed at Lincoln Center, the Kennedy Center and the Hollywood Bowl, as well as with such musical artists as Rosalia, Sia, Elton John and Britney Spears.
For years, the company was based in the Wallace Annenberg Center for the Performing Arts in Beverly Hills. The chance to dance in a working office complex built to the buttoned-down tastes of 1990s business executives holds special appeal to company founder Jacob Jonas, a Santa Monica native who got his start as a street performer on the Venice boardwalk at age 13.
"Our neighbors are some of the leading corporations in our country. There's something really validating about that and sharing our work," he said. "When you have people working behind a desk from 9 to 5 and then being able to expose them to creativity and expose them to art in such a unique setting, that crossover is rather beautiful."
Workers and visitors at the Water Garden can take workshops in floral design, see weekly comedy shows and attend movie nights.
Nearly a fifth of the L.A. County's office space was unleased at the end of last year, according to CBRE, and more empty space may hit the market soon as tenants hoping to save money try to sublease unwanted space due to concerns of a constricting economy and potential layoffs. Some are reducing their space because their employees are working remotely.
"The general consensus among most economists is we're heading into a recession," said Bradford Ortlund, a research manager at CBRE. Many companies are declining to expand their offices or reducing space as they wait for the economic picture to come into focus.
The nature of upmarket offices was already shifting before the pandemic as many landlords toned down the dramatic formality of their entrances originally intended to confer status and trustworthiness on the companies inside. As aloofness fell out of favor, owners set out to make their lobbies and courtyards places to linger and enjoy rather than simply pass through in awe.
Their desire to get people working remotely back into offices makes hotel-like hospitality freshly valuable, said the owners of U.S. Bank Tower, the tallest office building in Los Angeles at 72 stories.
It was built to be an imposing corporate cathedral in 1989, but landlord Silverstein Properties is close to completing a $60-million makeover intended to make it feel more like a laid-back hotel where tenants and visitors are invited to kick back. The lobby will include a cocktail and juice bar, a coffee bar, a grab-and-go market of packaged foods, communal tables, a large lounge with plush seating and cabanas to add a resort flair.
Staff will focus on hospitality, said tenant experience manager Melanie Navas. People's names and birthdays are to be remembered. The 54th floor is a tenants-only lounge with a coffee bar and weekly breakfast spreads to help inspire a sense of community. There are yoga classes at the gym on the 57th floor with views of the city.
"The goal is to get people to feel like they want to come back to work and come back to the building," she and, "and having them leave happy."
Art is a top priority for Brookfield Properties, the largest owner of office space in downtown Los Angeles, which has a longstanding program of engagement with tenants. Permanent and rotating art displays are pleasant — and good for occupancy, said Bert Dezzutti, head of the western region for Brookfield.
"Younger workers are more likely to return to the office if they are around art," he said, citing a survey Brookfield commissioned in the United Kingdom last year that also found that art and cultural activities improve people's sense of wellbeing and makes them more productive at the office.
"One positive that has emerged from the tragedy of the COVID-19 pandemic is a new focus on what makes a 'happy' workplace," the survey report said. Findings suggest that workers want to work in spaces enriched by art, culture and wellness, which they believe promote creativity and contentment.
"The offices of the future must be more than machines for working in," the report said, "they must cater to the rich inner life that we all possess."
One youth-friendly program Brookfield puts on in L.A. is an annual music festival that follows the Coachella Valley Music and Arts Festival. Acts from the popular desert concert series appear after work on four August nights at a Brookfield office and retail complex near Crypto.com Arena.
Musicians from the Colburn School perform acoustic sets at another Brookfield property. There are DJ concerts open to all and wellness events for tenants that include skin care classes and meditative sound baths.
"We're creating opportunities for people to interact," Dezzutti said. "It's all about engagement."
This story originally appeared in Los Angeles Times.