Presented By: Partner Insights
HqO and Commercial Observer’s Power Properties List To Honor Best CRE Spaces
Vornado’s PENN 1 in New York City is the first eligible space for this new, exclusive recognition, having just secured its Best Spaces to Work certification.
Given the massive, recent changes in the nature of office work, it’s more important than ever for office building owners, operators, and occupiers to have every tool at their disposal to provide the best experiences at their properties, including the end-user data and insights to demonstrate that value to tenants, employees, and investors alike.
To that end, HqO, the world’s leading real estate experience platform, in partnership with Commercial Observer’s Brand Studio, has announced an innovative new program for honoring those that are exceeding on this front.
The Commercial Observer’s Power Properties list, powered by HqO’s Real Estate Experience (REX) Platform, will recognize the top buildings, offices, and amenity spaces across the country that provide tenants and their employees with innovative, engaging, and productive spaces to work in.
To be eligible for inclusion on the list, office properties and spaces must earn an HqO Best Spaces to Work certification, the only recognition that validates end-user real estate experiences in spaces across the globe.
Following the launch of the Best Spaces to Work program last month, HqO certified the first property, Vornado’s PENN 1 in the heart of THE PENN DISTRICT in New York City. The gravitational epicenter of Midtown Manhattan and the most connected neighborhood in the City, PENN 1, a 2.5 million square foot, 55-story tower with breathtaking 360-degree views of the city and direct access to Penn Station and the new Moynihan Train Hall, recently underwent a building-wide renovation. Viewed as the first step in creating a 10-million square foot connected campus – a vibrant crossroads that blends connectivity and community – Vornado has designed and reprogrammed the district to include premium office space, over 10-acres of new public plazas, new landscaping and green space throughout, over 1 million square feet of new retail offerings, a plethora of dining options, and a host of new and improved entrances to Penn Station and the subway system.
“The moment prospective tenants arrive at PENN 1, they realize it’s unlike any other office space in New York City. Our building-wide redevelopment has been successful in attracting forward-looking companies that are equally committed to creating a dynamic, exciting, and collaborative workplace,” said Vornado Realty Trust (VNO) Executive Vice President Glen Weiss. “Our tenants continue to explore all three floors of our new “WorkLife” amenities including a grab-and-go coffee bar; full-service restaurant, bar and private dining rooms; a wellness and fitness center; and an array of flexible workspace and conference facilities. Our long-standing partnership with HqO has helped position us as an industry leader in tenant experience in THE PENN DISTRICT. We are honored that PENN 1 is among the first to receive this industry changing designation and we look forward to certifying our entire portfolio across New York City, Chicago, and San Francisco into this innovative program.”
HqO’s REX Platform, based on the proven methodology of Leesman, the industry’s most trusted workplace experience data source and benchmarking framework, assesses and supports the health and performance of a customer’s experience within a physical space. The Intelligence product suite, a critical component of the platform which generates a space’s REX Score, the quality measure of end-user experience within a space, is the key to the Best Spaces to Work certification.
To secure a REX Score and a Best Spaces to Work designation, participating organizations need only launch the REX Assessment. This digital questionnaire takes no more than 10 minutes for a space’s end-users to complete and focuses on the importance of three categories of office experience: cultural aspects, activities, and physical & service features. Scores that beat the REX Index benchmark earn the Best Spaces to Work certification and are automatically eligible to be considered for the Commercial Observer’s Power Properties list.
“Real estate is transforming into an experiential business. Office space was once a required cost of doing business. But given how work is evolving, properties need to evolve as well to provide exceptional employee experiences to enable occupiers to get hard ROI from talent attraction, engagement, and retention,” said Chase Garbarino, Co-Founder and CEO of HqO. “Real estate not only needs to be more flexible to meet the needs of end-users, but it must also connect with them through experience, putting the customer and their experiences of space at the center. We are so proud to partner with the Commercial Observer to recognize the distinguished owners, operators, and occupiers alike who are taking the lead in this critical market transformation.”
As the first certified Best Spaces to Work, PENN 1 is doing just this as they orient their entire property experience around their end-users, including anchor tenant Anthem Blue Cross and Blue Shield. “Our company has been serving the health needs of New Yorkers for nearly 90 years supporting their whole health, including physical, mental, emotional and social needs,” said Victor DeStefano, President of Anthem Blue Cross in New York. “PENN 1 provides the ideal space for our teams to come together and collaborate. The innovative design, bright open space and incredible views help inspire our work while the facilities provide an array of convenient services.”
Given the capabilities of the REX Platform, HqO is uniquely qualified to quantify the nature of employee experience. “As a technology and data firm, we are the only platform providing the health score of an end-user’s experience of physical space. And with data from over 1.8 million employees across over 8,000 workspaces, we can provide granular data on those experiences. But we appreciate that while we provide a lot of insights, there is still the need for some subjective and editorial overlay in terms of the data that we collect,” said Garbarino. “And we didn’t think there is anybody better for this than Commercial Observer to help identify and recognize the Power Properties.”
With the REX Score and the Best Spaces to Work certification, landlords and occupiers finally have an objective, data-based standard to demonstrate how well they are fulfilling tenant and employee needs. This is a crucial metric previously lacking for tenant retention and leasing in an age where attracting employees back to the office is more important than ever.“Owners need much better data to prove that what they’re doing is really valuable so they can speak to not just heads of real estate, but CFOs, who are facing down a tougher economy, and HR, which is heavily involved in thinking about how physical space and the office contribute to their company’s goals,” said Garbarino. “They need objective hard evidence that an office is going to contribute to their performance moving forward.”
In addition to these advantages, because REX Assessments evaluate the employee impact of over one hundred physical and service features of the office, a space’s REX Score can help determine which amenities provide a worthwhile ROI. For example, many REX Assessments show that the top employee concerns for their offices are comfortable desks and chairs, and quality food and beverage options.
“In the current market conditions, we’re seeing significantly higher tenant improvements. Landlords are forced to give on a lot,” said Garbarino. “We’ve seen furniture allowances and other terms in which landlords are working hard to partner with the tenant to provide excellent in-suite experiences.”
“End-user experience metrics can assist in not only dealing with current and prospective tenants, but with the investor community as well. When we’re talking to investors or lenders and we’re still doing work on price discovery, we have to do a better job of measuring demand and utilization to prove the true value of assets,” said Garbarino. “As an investor, I’m going to want to know, is this an asset that’s future-proofed? Is it something that the employees are going to want to come to? Is it something that’s going to help these tenants from an ROI perspective on their biggest expense – their people?”
With the REX Score, the Best Spaces to Work certification, and now the Power Properties list, HqO hopes to redefine the way physical spaces are built, experienced and evaluated – that being completely around the end-user – so that they can do their part in helping create spaces that truly serve the evolving needs of those who use them.
“This is going to be one of the most turbulent, but also progressive times in terms of orienting this industry around its customers,” said Garbarino. “We’re very excited to highlight the best performers, like PENN 1, that are leading the transformation of the real estate market, investing in their real estate experience strategy to support leasing, optimize operating expenses, increase tenant retention, and ultimately drive NOI.”
The Commercial Observer ‘s Power Properties list will be compiled by Commercial Observer using qualifying properties from the REX Platform. The winner will be honored at Commercial Observer’s annual Power Gala, which recognizes the commercial real estate industry’s greatest power players of the year.
To learn more and get your space Best Spaces to Work certified, click here.