Tenant Satisfaction Is On The Rise. How You Doin’?
Good news for property managers: a recent Kingsley Associates survey found that overall tenant satisfaction increased across almost all commercial property types in the third quarter of 2019. This takes into account 2 billion square feet of office, industrial, medical office, and retail properties across the U.S. The only exception was the retail sector, where satisfaction shows a slight decline.
These findings by Kingsley Associates, a provider of real estate intelligence information, was analyzed in an article in Commercial Property Executive. Among the findings:
- Positive relationships and experiences with the property management team lead to greater satisfaction with the tenant experience.
- Responsiveness, accommodation of special requests, and problem resolution are the most significant facts in tenant satisfaction with property management; as a result, these factors highly affect tenant retention.
- Tenants in all sectors who claim to be “satisfied” are more likely to renew their leases when it’s time to do so.
- Within management satisfaction, tenants indicated that communication is an essential factor. The survey revealed that proactive contact positively impacts tenants’ loyalty and renewal rate, and therefore, it is recommended that property managers make a strong effort to get back with tenants on non-emergency requests within 24 hours. Are you “on demand” enough for your tenants? Find out by reading our blog post.
The U.S. markets with the highest scores: Boston, Chicago, and Dallas are all tied with very healthy scores of 94 percent. The lowest score: New York with 89 percent.
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Let’s break down the results by sector:
According to the survey, office tenant satisfaction increased slightly — 1 percentage point — in 2019’s third quarter. Previously, the score was 90, and it increased in the third quarter to 91. These show the highest satisfaction scores in years, but not as high as the score reached in 2014 (88.5-88.9 percent).
Changes in tenant satisfaction in the industrial sector are a little more dramatic as an over time trend. The scores are generally lower to that of the office sector, even though those scores increased from 86 percent in Q2 to 87 percent in Q3.
It’s important to note that property management remains a key factor in tenant satisfaction improvement, 3rd only to space requirements and price.
The industrial sector markets with the highest increases in tenant satisfaction from the previous year: San Francisco with (7.2 increase), Seattle (4.7 increase, and Dallas (3.0 increase).
Medical office tenant satisfaction has been trending up for the past six years. In 2019, satisfaction has remained steady. Q2 saw a decrease, but it increased to 90 percent in Q3, remaining consistent with scores seen in Q1. Again, property management was mentioned as a major influencer when it comes to renewal.
We have good news for Atlanta: tenants here are the more increasingly satisfied as compared to other markets: a whopping increase of 7.1 percentage points. The most significant decreases are seen in San Francisco (decrease of 9.8 points) and Seattle (decrease of 7.7 points).
In general, retail tenants are less satisfied than those tenants of other commercial sectors. The quarterly results resemble a rollercoaster ride: 79 percent in Q1 2018 then we see a back and forth with declines and increases in the quarters following.
As far as the most recent survey, this sector has seen a 1 point percentage decrease: 77 percent satisfied in the third quarter as opposed to the previous 78 percent satisfied. A higher percentage of tenants in retail listed property management as a factor that influences their decision to not renew over any other commercial segment.
Despite the retail apocalypse, Seattle shows the highest overall increase in at 85 percent satisfied this quarter as opposed to 60 percent the previous year (a whopping 27 points!).
One way to improve your tenant satisfaction score: efficient emergency communications
What lifts up tenant satisfaction is when a property manager can go above and beyond with their communication and follow up, particularly when tenants find themselves in an emergency situation. Tenants expect seamless, professional, accurate, real-time service and solutions and that expectation only increases during an emergency.
Kings III Emergency Communications offers technology and professional staff who can help tenants in less than desirable situations such as an elevator entrapment. Our digital recording and storing of all calls provide you with invaluable event details for heading off potential litigation and our smart line seizure technology helps you eliminate costly dedicated emergency phone lines. Our team also keeps you in the loop so that you have the opportunity to follow up with your tenants, employees, and visitors after an incident. This coupled with advanced emergency operator training allows us to provide a service your building can be proud of with the level of care your tenants deserve.
Get in touch with us to learn more about how you can maximize your property’s emergency communications here.
Kings III was honored to be recognized by its employees and The Dallas Morning News by making the daily newspaper’s Top 100 Places to Work list, falling in at 17th in the midsize companies category, jumping from its 26th standing in the previous year.
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