12 July 2004

RealEstateJournal | Landlords and Tenants Disagree on Priorities

RealEstateJournal Landlords and Tenants
Disagree on Priorities

Staff Reporter of The Wall Street Journal

From The Wall Street Journal Online

Talk about being out of sync with your clientele.

Accounting and advisory firm J.H. Cohn LLP recently surveyed a group of mostly developers and landlords in New York and New Jersey, asking them to, among other things, rank four factors -- technology, life-safety systems, high-end finishes and security -- in the order they believe are important in attracting tenants.

New York respondents ranked building security as the most important factor, while New Jersey respondents put high-end finishes first. Both New York and New Jersey respondents put life-safety systems -- which include fire alarm, sprinkler and communications systems -- at the bottom. Robert DeMeola, the partner in charge of J.H. Cohn's real-estate services group, which conducted the survey, says he was 'so surprised' that all respondents ranked technology and high-end finishes as more important than life-safety systems.

To determine whether the group of 59 respondents were out of touch or simply had 'short memories' of what happened on Sept. 11, 2001, Mr. DeMeola decided to pose the same question in an informal telephone survey to a handful of major tenants that recently leased space in Manhattan. (His group plans to conduct a formal survey of tenants.)

The result: The tenants deemed life-safety systems followed by building security as the most important of the four factors.

There's 'a disconnect between landlords and tenants,' says Mr. DeMeola. The results make clear that 'before landlords put a waterfall in the building, they should be putting in extra security' measures and 'upgrading life-safety systems and emergency lighting,' he says. Landlords are 'precluding a lot of the higher-end tenants' from their buildings if they don't."

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