At Swivel we’re no different than anyone else – we’re scrambling to make sense of the public health lockdown that hit us so suddenly just last week. This is a first-of-its-kind event, so it makes sense that we all need a week or two to process what it means for our companies and employees, not to mention our own families and loved ones.
Like almost all industries, commercial real estate is sure to see ( already seeing, for that matter) a dramatic pause in leasing activity for office space. This is to be expected, but it is important that we do our best not to let the pause turn into a deeper and more extended halt in leasing activity.
U.S. businesses are nothing if not resourceful, creative, and patriotic, as the quick and powerful response to the 9/11 shock showed us 19 years ago. The country recovered quickly as citizens and businesses pulled together in response to an external and unpredictable shock (the ‘08 financial shock was a different beast).
This note suggests three important adaptations that tenants and landlords can make to help mitigate the extent of this current crisis.
To be clear, Swivel is not trying to use this situation to sell more of our technology. But we do feel very strongly that we need to do what we can to help landlords and tenants maintain momentum, and hopefully play a small part in making sure this phenomenon doesn’t cripple our economy.
First, use virtualization technology to help tenants tour spaces while maintaining social distancing guidelines.
Listing agents can use technology from Swivel and many other providers such as Matterport to offer virtual tours that allow tenant prospects to tour and experience spaces virtually and remotely. It is even possible for multiple team members to experience a virtual tour from separate locations, which is all the more helpful as people have shifted to working from home.
Replacing scheduled in-person tours with virtual remote tours can help both tenants and landlords maintain momentum in their current leasing decisions.
Remote virtual tours are becoming standard in many place-based decisions, such as apartment leases and even campus visits. Now is the time for office leasing to get in the game.
Second, landlords can create more flexible leases to make tenants more comfortable with committing in uncertain times.
Long-term committed leases--which are often for five years or longer, with no ‘out’ clauses--make sense in times of great business certainty; tenants have high confidence about what the future holds and don’t see leasing a large amount of space for a long period of time as excessively risky. But in uncertain times, tenants can and should expect more flexible lease contracts to mitigate risks.
New tech-based platforms and associated innovative leasing and occupancy structures, such as LiquidSpace’s DASH license and Swivel’s Agile Lease, enable landlords to quickly add flexible leases to their mix. These technology platforms and others like them allow tenants to find and lease (or license) spaces for terms of between one and four years, with options to move if their plans change.
The result is properties with a mixture of leasing ‘products’ that can satisfy both long-term as well as shorter-term tenants.
We’ve been talking about the flexible leasing revolution for years now, and now is the perfect time for landlords to roll out these options.
Finally, remote work is here to stay, so let’s help companies lease and use space smarter.
Many tech companies have already embraced remote working as a way to increase productivity, relieve the pressure on commute times, and attract from a wider pool of talent. Now, this crisis has made us all remote workers, whether we’re ready for it or not.
As the workforce adjusts to this new normal, remote work is likely to become a permanent change for many, and this will not be confined to tech companies only. We should expect more mainstream tenants, not just tech firms, to leverage remote work going forward.
This will not mean the end of all leases, but it will mean that tenants will want to use their leased space in new and more efficient ways that accommodate both remote and in-person work styles. .
Tenant representatives and broker platforms have a critical role in helping potential clients and tenants to strategize how much space to lease, for how long, and how to use that space. New remote technologies like Teams, Slack, and Zoom are just the beginning. Sophisticated analytical planning tools, available from leading brokerages such as JLL, and online brokerage platforms, such as Tenantbase and HelloOffice, can help companies use their space strategically and embrace remote work in order to save real estate costs and increase employee engagement and productivity.
While we think these technologies have the highest potential to keep our industry on track in trying times, they are by no means the only ideas. We’d love to hear from you if there are other technologies companies should be embracing.
And we’re happy to provide information on any of the technologies (or others like them) discussed above--just give us a call.