Magazine article Journal of Property Management

Retaining Tenants during Renovation

Magazine article Journal of Property Management

Retaining Tenants during Renovation

Article excerpt

Tenants are usually very pleased with the modern conveniences and new environments that are created after a major office renovation project has been completed. The problem is to keep them content, and in place, while that renovation process is under way. There is no magic formula, but experienced management, sensitivity to tenants' needs, and careful planning are vital. These are some of the keys to successfully maintaining tenants during renovation.

Typically, tenants are most concerned about factors that interrupt their daily business operations: continued elevator service, building access, dust and dirt being brought into their suite, heating or air-conditioning shut downs, security, deliveries, and access and signage to direct visitors or customers around construction.

Careful attention to details, such as running a second elevator manually during peak transit times or adding extra vacuuming to ensure carpets are spotless, can help avoid tenant frustration and pay dividends at renewal time.

More extensive renovation efforts may require a more creative approach to avoid inconveniencing tenants. For example, a steel canopy was built inside the lobby at 105 West Madison in Chicago so that building access would not be interrupted during a major renovation. Above the canopy, tradesmen completely dismantled the building's second floor to create an atrium. The new floor was put in at night. When the canopy was removed, tenants entering the building found themselves in a two-story glass lobby.

Communicating is a priority

Whether you are embarking on minor capital improvements or a major rehabilitation undertaking, good tenant communication stands out as one of the most important components. Almost any physical change in the work environment can be disruptive and potentially threatening to the tenant's business. It is management's, and ultimately ownership's responsibility, to make sure tenants are kept informed every step of the way during construction.

Early communication with tenants can make them feel as if they are part of the renovation process, instead of becoming victims of the procedure. Retail tenants are particularly sensitive to signage and good access to their space. The most trivial inconvenience to their customers can impact business dramatically. While many companies rely primarily on memos and building newsletters, we find it more productive to meet with representatives of each tenant personally during the months prior to the beginning of construction. All key personnel help with these contacts, including property managers, leasing agents, construction managers, and chief engineers.

At 223 W. Erie in Chicago, we also scheduled a continental breakfast in one of the vacant spaces and invited tenants to attend. The presentation included renderings, floor plans, and schedules of the work that could be taken back to each office. That meeting was attended by the property manager, the owner's representative, and the construction manager.

Ongoing communication is equally important. The property manager and/or the construction manager should meet daily with tenants whose spaces are under construction. Office managers need to know what space will be worked on the following day and what space will be available for employee use. This update enables tenants to move employees as needed and helps keep construction work on schedule. …

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