What Canada Can Learn From Chicago on Office Amenities

CBRE’s Brendan Sullivan recently returned from a discovery visit to Chicago, where one thing stood out to him about the office buildings there. Landlords in the Windy City are much farther along when it comes to executing on amenity strategies and delivering world-class tenant experiences.

“Chicago has to be the most amenitized office market in North America,” says Sullivan, a Senior Vice President who heads CBRE’s Canadian Investor Leasing business.

“It’s not just new builds but the repositioned assets, too. Landlords in Chicago have created amenity packages that are advanced compared to many of the strategies we see across Canada.”

Landlords are using amenities to lure employees back to the office in what’s become known as the flight to experience, and Chicago is leading the way.

Office buildings in Chicago often offer a combination of different amenities “all playing together in a single value proposition,” Sullivan explains. “The retail amenities are playing off the fitness amenities, the social club and the outdoor amenities. It’s not just one amenity, it’s a synergistic suite of them, which creates a unique experience strategy.”

“And it’s all done in a very purposeful way,” he continues. “For employees in the building, it’s like living on a campus. You gain a lifestyle and can spend your whole day onsite experiencing all the amenities on offer.”

One Chicago building in particular captured Sullivan’s attention: 110 North Wacker, aka Bank of America Tower, a 55-storey, 1.5 million sq. ft. Class A office development located in the city’s West Loop submarket. The CBRE team marketing the project says 110 North Wacker represents the “evolution of the tenant experience.”

The Goettsch Partners-designed building was celebrated as NAIOP’s 2020 Office Development of the Year and boasts amenities including three floors of bar, fast casual and fine dining options, the latter powered by Michelin Star chef Jose Andres; a professionally operated fitness and wellness centre with yoga, chiropractic and massage and spa services; and No 18, a third-party run conference and event space on the 18th floor. "It's an example of an exeprience strategy delivered," says Sullivan.

Bigger Buildings Deliver More

It helps, Sullivan says, that Chicago buildings tend to be bulkier than most office towers in Canadian markets, with 1 million sq. ft. buildings in abundance in Chicago. “Those bigger buildings lend themselves to more amenity offerings.”

But he also thinks that Chicago and American landlords generally have a greater appetite for the risk associated with these kinds of value propositions.

“In Canadian cities like Vancouver, Toronto and Montreal, we see that office tenants are leasing in quality spaces with the best experiences, but we aren’t all in on facilitating that shift,” he says. “American landlords, on the other hand, are far ahead in terms of renovating to anticipate what people want and pull even more tenants to the experiences they are creating.”

A case in point, he says, is Google’s plans for its new HQ at a redeveloped Thompson Center in Chicago.

The centre’s signature 17-storey, light-filled atrium will remain and the covered colonnade at the base of the building will be redesigned to allow for an enhanced ground floor experience, including opportunities for more food and beverage retail and seasonal activations of the plaza. Covered terraces on three levels of the building will offer new greenspaces.

“In Chicago it’s clear they identified flight to experience as a priority long ago and have fully leaned into it,” Sullivan says.

And it’s not just the fanciest buildings buying into this concept. Even the landlords operating Class B buildings in Chicago are getting into the flight to experience game, Sullivan points out. “Flight to experience applies to every office landlord in Chicago, even in the suburban markets. It’s not only those buildings at the top of the office market that are becoming fully amenitized.”

Experience Strategy is the Future

Sullivan’s message for Canadian landlords who believe their lone conference centre or tenant lounge is a differentiator: “The days are numbered,” he says. “That type of amenity will be commoditized in five years.”

“The challenge for Canadian landlords is to determine out how to deliver an experience strategy that develops an occupant ecosystem, including amenities, and to continue to innovate upon and elevate that tenant lifestyle.”

Office landlords don’t have to do it alone, either. One possibility Sullivan suggests is to do as the American landlords do and enlist professional third-party managers of amenity spaces.

“Landlords are busy and highly specialized, and we have some of the best in Canada," he says. "But they would do well to recognize that there are advantages to bringing in an outside group that specializes in offering hotel-like experience strategies through managed amenities for office buildings.

“I walked into one building and it felt like I was walking into a Park Hyatt. You won’t often get this experience in Canada’s major markets, but in Chicago it was seemingly everywhere.”