Fido? For Sure.
(As reprinted from my published piece for the Institute of Real Estate Management)
The newest building occupant in downtown San Francisco has warm brown eyes and a soft fur coat ruffled by the bay breeze. He's a French bulldog who promenades through the building lobby, his bright yellow collar crisp against the gray lobby wall. The realm of tenant amenities has expanded to include pet friendly policies — mostly for canines — with a host of supporting services. As a result, property managers and landlords face added concerns associated with the animals.
As part of competitive marketing efforts, many landlords have adopted pet-friendly policies to lure tenants who value dogs as an important employee perk. (For purposes of this discussion, I'm discussing dogs yet exempting service dogs, who, per the Americans with Disabilities Act, fall under a special set of rules and guidelines. But you can read more about accommodating emotional support animals in the workplace in the May/June issue of JPM.) According to Fortune magazine, companies who allow dogs to accompany their owners to work include Amazon, Bissel, Google (nicknamed "Dooglers"), WorkDay and Ticketmaster. It's all "workplace wellness," the catchphrase of the leasing day, as there's ample evidence that pets boost morale . . . at least for their owners and other dog lovers in the office. Not to mention the adorable Instas, Snapchats and VSCO posts....did I mention adorable? Further, perks such as bringing your dog to work can create a hiring edge for one company over another. In turn, these healthy, rent-paying tenants create solvent landlords.
As we know, all real estate markets are not created equally, and some areas appreciate pet policies more than others. For example, at San Francisco's recent Bisnow leasing conference, one landlord stated its pet-friendly policies had been instrumental in signing a large technology firm, NerdWallet, as tenant. In another example, Salesforce touts its "puppyforce," a communal workspace where employees can bring their furry friends. The affinity group allows supervised doggie day care while working. Of course, for markets dominated by more traditional or formal companies, the ability to bring Fido to work carries less cachet. In markets that do value such policies, however, landlords sometimes amplify the amenity with dog treats, pet insurance, designated outdoor runs, and grooming services.
All these pet amenities can make a property manager reach for a large bottle of aspirin over the insurance and property damage concerns. For example, what if the dog bites another building occupant? What happens when Fido chews the corner of the oh-so-plush lobby chairs? And how to respond to the allergic tenant who sneezes in the next cubicle? Like any property management challenge, an approach often lies in one's set of particular circumstances. For instance, a tenant who occupies all or most of a building will influence building policy much more so than a multi-tenanted property. In that case, the burden tends to shift to the tenant who must contend with its own employee allergy issues. And common area spaces are assigned to that one tenant, making repair responsibilities for the chewed chair more straightforward. Still, even in situations with more easily solved management issues, insurance and lease documentation remain critical considerations.
Today's lease and insurance documents often address pet policies in a nicknamed "Dog Clause." Clauses have been redrafted to require that dogs be kept on leases, have current vaccinations, are attended, and are free of ticks and fleas. Further, remedy language addresses such items as dog bites, damage, and "in serious circumstances, terminate a tenant’s right to continue bringing pet dogs to work," according to the Commercial Property Executive newsletter. Generally, a wayward doggie allows the landlord to notify tenant with notice periods, remedies and consequences similar to other use and damage and destruction clauses. (Like any good document, this one contains a disclaimer: this blog is not intended to offer legal advice, and you should consult your own counsel.)
Today's evolving office market means new ways to ensure that tenants are happy and healthy. After all, a happy tenant often translates into a long-term relationship, creating a steady income stream for property managers and landlords.
Now, where can I buy one of those bright yellow leashes?