Perhaps our father would not agree with this statement in a literal sense, but even he would acknowledge that the office sector is experiencing a level of change unseen in his 55+ year career. For many years, office investors and owners have been frustrated by the combination of tenant downsizing and turnover, as well as the relentless rise in both capital requirements and operating costs. This has weighed on cash flows and, as a result, office values and investment returns. What was once the darling of real estate asset classes is now nearing the bottom of the list for many institutional investors.
This dissatisfaction has created an opportunity for office investors and managers who can develop creative and effective strategies to reverse these negative trends. For Lowe, this strategy revolves around people and experiences. Lowe has tapped into its nearly 50 year history of owning and operating hotels, resorts and office buildings to establish its investment and management platform, Hospitality at Work®. As its name suggests, Hospitality at Work is rooted in a customized, high-touch hospitality approach to managing commercial properties which celebrates our corporate vision of making people the most valuable asset in real estate.
It is true that other commercial property operators, large and small, have touted new efforts to change the way they view the office world, and many refer to hospitality. However, to date, the industry focus has naturally and largely been on efforts to build a “creative” environment by investing in capital improvements that make building common areas look more like tech company spaces. Lowe believes that these kinds of capital programs can make sense under the right circumstances. The difference that Lowe brings is its DNA in the hospitality business which manifests itself in a deep appreciation for customer service and satisfaction. With Hospitality at Work, Lowe has turned office management upside down with its customer-focused and experience-laden property management model. Lowe starts by hiring people who have a hospitality background and/or nature and training them to apply their skills to office tenants. We treat tenants and people who office in our buildings as customers and guests rather than business relationships. Our managers (known as “building hosts”), engineers and security personnel all serve as ambassadors for the building, working every day to not only run an efficient building, but also to create a culture and community within the building. The results have been compelling, evidenced by increased absorption and renewals, and more satisfied tenants.
Lowe is dedicated to making people feel welcome and appreciated, to helping them make connections with others in the building and to offering programming that is curated specifically to the interests of the building population. By creating this kind of positive energy and enjoyable co-habitation environment, tenants will have a reason to want to stay in the building. Ultimately, keeping tenants in buildings reduces the heavy cost of turnover and will lead to investment outperformance. Our company’s mission is to build value in real estate for those we serve by creating innovative, lasting environments and meaningful experiences that connect people and place. By going beyond buildings to focus on people, experiences and connections, Lowe believes that it can find opportunity within the challenges and changes that the office sector will continue to face - and even our father agrees.