When commercial real estate talks about ESG, the focus often falls heavily on the "E" for Environmental, leaving the "S" for Social and “G” for Governance as afterthoughts. There's a constant buzz around sustainability certifications like LEED and GRESB, but the most forward-thinking companies are also committed to a robust Social strategy. Not only are they a signal of a company’s ethics and values, but they’re essential for engaging employees and helping them feel connected to their work community. As the Scott Rechler (CEO of RXR) saying goes, “doing good and doing well means doing better.”
Industry leading owners are increasingly viewing Social strategies from a portfolio perspective, recognizing that creating vibrant, engaged communities can drive significant value. At the VTS Accelerate conference in 2024, Shannon Lowe, VP of Worldwide Corporate Real Estate and Facilities at Amazon, shared an insightful perspective: “A really important strategy for real estate for us is that we were going to be in an urban-centered environment.” He elaborated, noting that Amazon believes employees do their best work when they are connected to the community. This approach underscores Amazon's commitment to fostering a sense of community for their employees, ensuring that their workforce is integrated into the bustling life of the city, which in turn enhances their productivity and well-being.
Amazon isn’t alone in prioritizing Social strategies. Owners like Ivanhoe Cambridge have invested in Social strategies to achieve ESG goals, emphasizing the importance of fostering strong community ties and enhancing the tenant experience (Source). These companies recognize that Social engagement within office buildings can lead to higher tenant satisfaction and retention, ultimately benefiting the bottom line.
In this blog, we’ll delve into how owners, asset managers, and property managers can leverage technology, specifically VTS Activate, to bolster their Social program goals with realistic initiatives that deliver outsized impacts and measurable returns. By integrating thoughtful Social strategies, buildings can become vibrant communities where tenants thrive.
Tenant and Regulatory Expectations for Social Responsibility
Tenant expectations regarding Social goals have intensified. Regulations and mandates in both the United States and Europe are increasingly emphasizing the importance of the Social aspect of ESG. The SEC’s recognition of human capital management as a significant material risk underscores the need for greater disclosure and proactive engagement in this area (Source). This shift reflects a broader trend where the welfare of communities and employees is directly linked to a company's bottom line and reputation.
In Europe, regulations are pushing the boundaries of ESG practices. For example, the EU Corporate Sustainability Reporting Directive mandates detailed disclosures on various ESG metrics, including Social initiatives (Source). This regulatory environment encourages property managers to adopt comprehensive Social strategies that can withstand scrutiny and demonstrate tangible benefits to both tenants and the broader community.
Tenants now expect their buildings to support not only their professional needs but also their Social and community engagement goals. In the VTS 2024 Global Workplace Report, “in-person collaboration and community” was the top reason that respondents answered when asked about the most enticing reasons to work in the office (Source). This includes fostering environments that promote health and safety, diversity, equity, and inclusion, and offer opportunities for meaningful community involvement.
By integrating thoughtful Social strategies and leveraging technology, property teams can meet and exceed tenant expectations, creating environments that tenants want to remain a part of. This approach not only enhances tenant satisfaction and retention but also aligns with broader regulatory trends and corporate Social responsibility goals.
Building Community within the Building
Does increased tenant satisfaction drive tenant retention and profitability? A study by the Massachusetts Institute of Technology found that leases in buildings certified for their “E” and “S” contributions average 88.3 months compared to 75.3 months for non-certified buildings, indicating that tenants are more likely to stay longer in buildings that prioritize ESG initiatives (Source). This increased retention not only stabilizes occupancy rates but reduces the costs associated with tenant turnover, making ESG investments a financially sound strategy for asset managers and investors. By implementing robust Social strategies, CRE leaders can create a community within the building that attracts and retains tenants, ultimately enhancing the building’s value and performance.
Promoting inclusivity
Inclusivity is another core aspect of Social initiatives, yet It can be challenging to implement inclusivity programs. One of the advantages of incorporating technology into community operations is the ability to cater to the diverse needs of your tenants, enhancing inclusivity and engagement. One low-hanging fruit is offering tenants and their employees communications and support in multiple languages. This approach ensures that all tenants, regardless of their language preference, feel connected and valued within their building community. Inclusivity not only improves tenant satisfaction but also broadens the community's cultural richness, making the building a more vibrant place to work.
Customizing programming to tenant needs
Creating customized events and programs is another way to meet the diverse needs of different tenants and connect them to the broader community. For example, tech companies may value networking events and innovation workshops, while law firms might appreciate professional development seminars. Property managers that lean on engagement tools to tailor and consistently communicate events and programming can ensure they reach and resonate with the intended audience. Solutions like VTS Activate that provide audience targeting capabilities help effectively communicate Social initiatives to specific audiences and tenants, keeping them engaged and regularly updated about upcoming activities. Regular updates and interactions foster a sense of involvement and community, which is vital for tenant satisfaction.
Gathering and responding to tenant feedback
Establishing feedback loops through surveys and direct communication channels allows property teams to adjust their community-building efforts based on tenant input. This adaptability ensures that programming remains relevant and engaging, catering to the evolving needs and preferences of the tenant community. Ivanhoe Cambridge’s Social strategy emphasizes partnerships and community engagement to solve Social challenges, such as supporting vulnerable populations and promoting diversity, equity, and inclusion (Source). These strategies align with broader corporate Social responsibility goals and can be implemented at the building level to create a stronger, more connected community.
By implementing personalized programming and inclusivity-focused initiatives within buildings using VTS Activate, property managers can significantly enhance tenant satisfaction and create an inclusive community. Understanding and addressing the diverse needs of tenants fosters an environment where everyone feels connected, engaged, and valued, leading to measurable returns for owners.
Beyond the Building: Connecting Tenants with the Neighborhood
While personalized programming can foster community within a building, only technology can quickly scale community programs that embed tenants into their surrounding neighborhood. Shannon Lowe emphasized the importance of embedding tenants within the community, stating that employees thrive when they are connected to local businesses and the community. Effective community integration can significantly bolster a property’s Social program goals, resulting in measurable returns for asset managers and investors alike. Here’s how leaders are contemplating Social strategies and implementing actionable initiatives.
Partnering with local businesses
One of the most impactful ways to connect tenants to the broader community is by partnering with local retailers and businesses to increase visibility and offer in-app perks and exclusive discounts. These partnerships provide tenants with valuable benefits while supporting local businesses, fostering a mutually beneficial relationship that strengthens the community. Platforms like VTS Activate allow property managers to seamlessly create and manage these partnerships, offering tenants exclusive perks that enhance their daily lives and increase their satisfaction with the building.
For example, tenants might enjoy discounts at nearby cafes, restaurants, and fitness centers, that automatically populate on a tenant engagement app. These perks create a sense of community and support local commerce, benefiting all parties involved, without adding additional stress on property managers to identify and advertise these offerings.
One successful program implemented by CBRE at 20 Martin Place in Sydney connects the community through a flower auction. Through their building app, tenants bid on a bouquet from a local florist, and the proceeds are donated to a local charity. This initiative fosters a sense of community and supports local businesses and a charitable cause.
Initiatives that encourage tenants to explore and engage with their surroundings promote a more integrated and active community.
Unlocking a campus environment
Different buildings require tailored promotion strategies for effectively connecting tenants to the local community. An individual building may have a more straightforward promotion strategy, whereas multiple buildings in a concentrated submarket requires more nuanced approaches to connecting tenants dispersed across multiple locations.
The Paramount Group is revolutionizing how they connect their tenants to the community by granting all of their New York tenants access to their newest club and amenity center, the Paramount Club at 1301 6th Ave, New York. Tenants of the Paramount Group are afforded access to the Paramount Club, a premiere venue with a wellness center, game room, and various dining options. This initiative not only adds value to the tenant experience but also revolutionizes how owners create value for their community across their buildings (Source). By leaning into a campus strategy, owners can create more effective and creative strategies that enhance tenant engagement and satisfaction.
Tailoring promotion strategies
Tailoring promotion strategies based on the location and type of nearby retailers is crucial for driving tenant engagement and supporting local businesses. For example, urban buildings with high foot traffic might benefit from partnerships with popular local eateries and shops, offering tenants convenient access to daily necessities and leisure activities. In suburban or campus-style properties, promotions might focus on nearby services and amenities that cater to the daily needs of tenants, such as grocery stores, fitness centers, and entertainment venues (Source).
By understanding the unique characteristics of their buildings and tenant populations, property managers and marketing teams can create targeted and effective promotion strategies that maximize tenant engagement and satisfaction. VTS Activate makes it easy to manage these strategies, ensuring that tenants receive relevant and timely information about local offers and events.
Leveraging modern communication tools
Effective communication is key to reaching tenants wherever they are and keeping them engaged with community initiatives. Modern communication tools, such as in-app messaging, email, text, and push notifications, ensure that tenants stay informed about the latest offers, events, and updates. Developing a comprehensive communication plan that utilizes multiple channels can help property managers maintain high levels of tenant engagement and satisfaction.
VTS Activate empowers owners and operators to build a sustainable community by engaging tenants with Social initiatives and providing seamless digital communication. This not only enhances tenant satisfaction but also drives measurable ESG performance improvements, contributing to a more communal and desireable environment for tenants.
Implementing strong Social strategies is essential for retaining tenants and building a connected community. VTS Activate is the tool you need to achieve these goals and make a significant impact.
To learn more about the Environment component of ESG in CRE, check out the first blog in the series: The E in ESG: How to Use Technology to Create and Promote Sustainable Tenant Experiences
For more information about VTS Activate and how it can help you, visit our product page or book a demo.
