In an office building glut, developers add extras to compete for tenants

The US office building industry - incorporating 9 billion square feet of space under its umbrella - is in transition. High vacancies in several regions and the impact of last year's tax overhaul are not the only issues facing management of office and mixed-use office facilities.

For one thing, the industry is larger than ever, and includes not only construction firms and developers, but a stronger representation than ever by financial firms, including banks, mutual funds, and brokerages. The ranks of those using offices are growing, too. Nearly 45 percent of the country's work force toils in offices, and this figure is expected to top 60 percent by 1995.

Owners of downtown as well as suburban office space are now finding they need to make significant changes to compete for tenants and be profitable.

``The building boom is over,'' says William Carleton, the new president of the Building Owners and Managers Association (BOMA). Mr. Carleton, a Columbus, Ohio, developer, is senior vice-president of the Galbreath Organization. ``To attract and retain tenants around the country, rental packages today are stressing new amenities.''

These new packages include more private bathrooms, physical fitness centers, individualized customized climate control systems, and - with the entry of more women into middle-management positions - more day care facilities.

Many of these extras are a direct result of the overbuilding phenomenon. Over 250 million square feet of office space has gone up each year since 1981. With much of this space going begging, building owners have had to upgrade their amenities.

``Demand on owners to satisfy the needs of this type of service economy environment are more numerous today,'' says Noel Leary, BOMA vice-president. ``More factors are considered in this soft market.''

Office conditions and amenities are frequently cited as more important issues than previously suspected.

Industry leaders insist that a proper office environment and location are not only important for prestige and convenience, but can be powerful tools for attracting and retaining good staff.

Both the white-collar and clerical workers have considerably greater skills than in the past. This new breed has higher expectations, and demands more in the way of office quality.

The larger geographic location of the office building is also proving important. The American Automobile Association (AAA) is leaving its long-time headquarters in Fairfax County, Va., and will relocate to Orlando, Fla. The reason given by the AAA was a shortage of good applicants for staff positions.

Some developers contend that an office complex boom has increased traffic congestion in the county, resulting in an apparent decline in the quality of life, and a shrinking labor pool.

In the eight decades of BOMA's existence, the task of the building manager has also changed dramatically. For years it was mainly concerned with maintaining boilers or replacing lost keys. Building management today regularly confronts state-of-the-art security systems, new telecommunications gear, and sophisticated climate control systems.

The Office of Technology Assessment reports that by 1990, 75 percent of office workers will use computers. Older buildings will have to retrofit to accomodate cabling and wiring.

``The end of a `9-to-5' orientation means customized temperature and lighting controls must be used,'' insists Mr. Leary. ``That can raise costs,'' although ``greater efficiency at lower cost'' will soon be possible with computers.