Real Estate

Why Childcare Makes Sense in Office Buildings and Other Real Estate

Childcare is an important issue for most office workers these days. It’s easy to see why. Expensive, hard to find, and very important for working parents. The pandemic has devastated the childcare industry, causing labor shortages and forcing many providers to close. This leaves many families unable to provide reliable child care, affecting women. resignation in large numbers. Employers know how important child care is, but it’s imperative for office owners and developers to reassess the inclusion of child care facilities on their properties and ask key questions. :Is childcare the ultimate office amenity?

Research on parenting paints a sober picture. More than half of Americans live in what is considered a “childcare desert,” with a child-to-vacancy ratio in licensed childcare facilities of at least 3:1. The average cost of childcare per child her is about $9,400 per year.According to McKinsey & Company studyUsing the affordability index set by the U.S. Department of Health and Human Services, childcare costs are no more than 7% of a family’s household income. Based on that criteria, the average cost per child isn’t affordable for a family with an annual income below her $130,000. Median household income in 2020 was $67,521.

Lack of child care options was a common problem before the pandemic, but has only gotten worse since. Workers in generally low-wage industries have left in droves and they have not returned. Childcare costs are so high that the number of working women is one million less than before the pandemic.

family affair

Not surprisingly, multiple studies have found that childcare, especially affordable childcare, is a top concern for working parents. A McKinsey study found that 69% of women with children under the age of 5 are more likely to work for employers that offer childcare subsidies or provide in-home childcare. Office building owners want to stay competitive to contract tenants and many employers want to bring workers back, so onsite her child care and/or subsidized Child care seems like a no-brainer. However, bringing in a daycare as a tenant presents some challenges. In dense urban areas like New York City, where millions of office workers use public transportation to commute every day, it’s difficult to take public transportation with infants, especially if the buses and subways are not running properly. Using is not a walk in the park. Stroller accessible.

The U.S. General Services Administration (GSA) has long served federal and nonfederal employees of government agencies across the country, as well as clothing maker Patagonia, automaker Mercedes-Benz, biopharmaceutical company Bristol, and others. We have provided independently operated child care services to major companies. -All Myers Squibb have on-site childcare at their headquarters campuses in more rural areas outside of the CBD. Patagonia has been providing this service to its employees since the early 1980s and is one of the company’s proudest, publishing a hardcover book on the company’s onsite child care for him called “Family Business.” He sells it on his website.

An outdoor space that is part of the Childcare and Early Education Center at Bright Horizon’s headquarters in Newton, Massachusetts. (Photo credit: Bright Horizons)

Whether office buildings are in urban, suburban, or somewhere in-between, landlords are thinking more about the idea of ​​introducing daycares. “There’s no question we’re seeing more interest in both campuses and clients who own facilities and share units,” said Bright Horizons, one of the largest childcare providers in the US. said Priya Krishnan, senior vice president of client relations at . Many of the company’s more than 700 offices in the United States and Canada are located in buildings owned by well-known commercial real estate firms such as Boston Properties and Jamestown Properties.

Bryan Koop, executive vice president of the Boston area at Boston Properties, said at a recent internal meeting that part of the “secret sauce” that sets the company apart from its competitors is the “activity-based space” within the property. I said yes. Part of how Koop defined that space was similar to his space, a studio that companies could use to shoot quick videos to communicate with employees across the country. But he also talked about ABS being used to house childcare centers like Bright Horizons. “This demographic will determine our future in terms of how things are consumed,” Cope said of parents with young children. He said early education facilities would bring great value to office buildings and today’s workers would be attracted to them. “We have to evaluate all the major projects. How do we fit this hub into the space?” he said. “In the future, talent will expect these things from where they go, no doubt about it.”


It’s not just office landlords looking to add a daycare or early education center, but tenants as well. Bright Horizons’ Krishnan said something extraordinary was happening last year as employers kept returning employees to work. are increasingly considering partnering with Bright Horizons to add childcare for their employees. “It’s half of what we’ve talked about in the last year and a half,” she said. Manufacturing plants, data centers, hospitals, and other health care centers, where many employees must be present at work, have a “significantly” higher than normal need for child care. Similar to childcare, the healthcare industry is facing labor shortages.

Carving out space to open a daycare could help retain employees by providing essential amenities. Krishnan was spotted at work at Bright’s Horizons headquarters in Newton, Massachusetts. “You work all day, your child has social spaces, has a structured curriculum, and sees friends four or five days a week.”

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Massachusetts has a serious shortage of childcare workers. In Boston, the pandemic has exacerbated the problem, with the number of day care centers dropping by 21% between 2017 and 2021. Boston Mayor Michelle Wu is trying to address the issue by putting more pressure on office development projects to include these much-needed facilities. Facility. Mr. Wu recently issued an executive order to more strongly enforce decades-old rules requiring developers of large projects to include day care centers or invest offsite in creating programs. did.

Other cities and states are also looking at ways to tackle child care issues by getting involved in existing and planned real estate projects.Earlier this year, San Diego city officials said they were considering dozens of transformations To address San Diego County’s lack of affordable options, move city-owned properties into childcare facilities. Of the target properties, 12 are office buildings. And Colorado Gov. Jared Polis has proposed turning unused space in state buildings into daycare centers through a public-private partnership.

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Contracting nursery tenants for retail stores on the ground floor of the building and other spaces within the property presents several challenges. Some jurisdictions require outdoor spaces to be made available for day care facilities. This can be a challenge in existing office buildings, especially in urban areas. Finding the right ground floor space for her with the right kind of exit is also a common problem. Another factor to consider is the parent’s preference for location. In cities where workers rely on public transport, many prefer easy childcare close to home to avoid long commutes with young children. Running out of space can also take time. Krishnan said the average construction of Bright’s Horizon facility, including the necessary licenses, could take him 16 to 18 months.

Whether companies embrace remote or hybrid work, or employees prefer to return to the office five days a week, parenting is essential for working parents. And while efforts are being made at various levels to help providers open more locations, hire more staff, and subsidize costs, issues around affordability and availability Although introducing child care centers as tenants may not make sense for all office buildings, many properties, especially suburban areas, offer significant benefits to tenants and their employees. There is a possibility. And for office landlords looking to upgrade their facilities and services to stay competitive, perhaps an on-site childcare center could be the game-changer they’re looking for.

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