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Amenities vital to office park leasing.

In today's recession with currencies fluctuating violently worldwide, we can take some lessons from history.

Teddy Roosevelt was speaking to a group of businessmen during similar economic times. After Teddy was done, a man came up to him and said, "Mr. President, I am just an ordinary businessman, what can I possibly do?"

Roosevelt said, "Do what you can with what you got, where you are, but do it."

Those words are as relevant today as they were at the turn of the century. In today's difficult economy, it's more important than ever to do "with what you got." Many office park landlords are seeing, for instance, that a quality product and a good price are no longer enough to make a deal. Where offices were once built "on spec" and filled before they were built, landlords are now painstakingly negotiating and adding amenities formerly left out. The hot issues involved in lease negotiations today were not necessarily the priorities just a few years ago. It's the proverbial buyer's market, and we're catering to tenants in many ways in addition to flexibility on price.

One issue that has become hot in the office park market, and one area where we can "do with what we got," is the amenity package. Today, tenants are often demanding that some amenities be put into the lease. They want a guarantee that the amenity package will be in place when they move in and remain though the lease term.

One of the major amenities sought is on-site food service. Employers want to be sure their employees can have lunch within an allotted time frame at a reasonable price, and many top-level executives don't have time to go out of their way for lunch. But more importantly, today, fewer companies are subsidizing meals or taking on the expense of installing cafeteria service. Tenants therefore are looking for on-site eating facilities.

The Prudential Business Campus in Parsippany, New Jersey experienced a demand for this during recent lease negotiations. The prospective tenant absolutely required on-site food service with a guarantee that it would be operable for five years, despite six other cafeterias operating on The Campus. In order to secure the deal, these arrangements had to be included in the lease. These types of requirements are becoming more and more frequent.

Another example of an amenity issue negotiated into lease documents is the availability of conference facilities. Companies are finding the need for additional employee training and seminars. Due to the cost for off-site conference space, many are looking to buildings that provide conference rooms for their use. Again, The Prudential Business Campus recently had to accommodate a prospective tenant's demand for this amenity in order to make the deal. This tenant demanded both types of conference facilities: that offered by the Hilton Hotel on The Campus and an on-site conference room for monthly seminars.

Another leading amenity sought today is child care facilities. With the emergence of the two-income family, daily child care has become a necessity. Throughout the country, the demand for work-site childcare is increasing as parents recognize the convenience and assurance of working near their children. Employers feel that having access to child care facilities helps them attract and retain quality employees. The children's center at the Campus accommodates 105 children ages eight weeks to six years, meeting the growing need for high-quality day care in the Morris County area.

Finally, a tenant relations program is a further distinguishing factor in this intensely competitive market. Tenant appreciation events, newsletters and other site-wide activities, such as holiday food or toy drives, help to foster a sense of community among tenants.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Gregorits, John S.
Publication:Real Estate Weekly
Date:Oct 21, 1992
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