The Impact of Workplace Amenities on Corporate Real Estate Strategies

by Lee Wagner, on Oct 16, 2023 8:00:00 AM

In today’s challenging labor market, workplace amenities have become critical to attracting and retaining employees who are both full-time in the office or working in the office on hybrid schedules. This has led to a trend of enhancing common areas with amenities such as employee lounges, conference facilities, fitness centers and, in some cases, even cashing in on the latest craze by adding pickleball courts. The goal is to make office spaces “commuter-worthy” in a post-COVID world, enticing the workforce to return to the office instead of working from home. While these amenities offer undeniable benefits, they come at a cost that every business owner and decision-maker must consider.

The impact of common area factors

To understand the true cost of these extra amenities, we must first examine the evolution of common area factors. In 1998, office layouts followed a simpler design. For a single-tenant floor, common areas made up about 5% of the total square footage, while multitenant floors allocated roughly 15%. Fast forward to 2023, and those numbers have surged to 13% for single-tenant spaces and a substantial 22% for multitenant floors. This shift is a response to the competitive challenge of creating workplace environments that can rival the comfort of working from home, with a heightened emphasis on communal spaces and office amenities.

The impact on rentable versus usable square foot calculation

Let’s put these numbers into perspective with an example. Say your business leases 10,000 usable square feet of space. In 1998, this would translate to 10,500 rentable square feet for a single-tenant floor or 11,500 rentable square feet for a multitenant floor once common areas were factored in. But today, with common area factors of 13% and 22%, respectively, your space requirement swells to 11,300 or 12,200 rentable square feet. That’s an extra 700 to 800 square feet required to accommodate these new building amenities.

The financial impact

Now, let’s delve into the financial implications. If the current market rate for office space in Dallas, Texas, within buildings that provide these amenities, stands at $44 per square foot (comprising operating expenses, excluding electricity), then the additional 800 square feet could amount to an annual cost of $35,200. The question is, is it worth it?

The dilemma

There’s no one-size-fits-all answer. It all depends on your business’s unique needs and circumstances. Some argue that these amenities are essential for attracting top talent, enhancing employee well-being and fostering collaboration. Conversely, others contend that the funds allocated to extra space might be better invested elsewhere – perhaps in hiring new employees or addressing other critical business needs.


In the world of corporate real estate strategies, decision-making is rarely straightforward. Every business must carefully weigh its priorities, goals and budget constraints when evaluating whether these extra amenities are worth the added cost. While they undoubtedly offer attractive benefits, it’s essential to remember that nothing in real estate comes without a price tag. Ultimately, the true value of these amenities is a question that each business must answer for itself.

Topics:Corporate Real Estate



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