The right tech for flexible real estate – what the experts say
Few office owners expect their buildings to revert to how they were in 2019. But, as we emerge from Covid-19 lockdowns, neither should we anticipate a universal pivot towards entirely remote work. Instead, there will be a new emphasis on flexibility – for companies of all sizes.
However, turning traditional offices into flexible ones often requires landlords to adjust their thinking and acquire new skills. The solution for many will be to adopt technologies and tools that remove the strain of new workplace models and let them focus on the real estate. But where to begin? We gathered some experts to find out.
On the panel:
- Franco Faraudo, co-founder, Propmodo (moderator)
- Rachel Gursky, VP of customer experience and technology, Industrious
- Brandon Medeiros, co-founder, Alidade Partners
- James Shannon, chief product and technology officer, essensys
What do occupiers want?
In a nutshell, said Rachel, they want to pay for the office space they use and not what they don’t. Brandon agreed that the benefits of flex are obvious: “It doesn’t stick more people into less space; it takes away the underutilised components of space.” With this in mind, it makes sense to move away from the idea of density (in terms of workers per square foot) as a measure of value. Productivity is important, but company culture is even more so. Brand touchpoints and opportunities for collaboration add huge value.
So, what should landlords do?
According to James, they need to transition from being asset owners to flex providers. This means a new focus on why people actually go to the office. “What experience do they need, what resources do they have to access and how easy is it to get what they want?” Which means that landlords have to provide shared space, brilliant technology and seamless connectivity, and simple ways to buy services. They also need to monitor their spaces in real time, to ensure it’s busy, safe and productive.
One common problem is that some landlords offer different experiences in different buildings, which creates a fragmented experience that doesn’t work for enterprise customers. When this happens it’s tempting to throw in point solutions to cover the cracks, but in the end this means a real estate specialist becomes a technology integrator. It’s much simpler to develop a global strategic approach to issues such as room bookings or access control.
Rachel referred to the increasingly common practice of signing up to work in a particular building the night before or even during your commute. This presents a big issue for landlords, who now have to manage capacity and access almost instantly.
As James said, it also impacts on occupiers. They are going to need systems of credits or quotas to let employees choose where they are going to work without overloading some locations and leaving others half-empty.
A consultative approach
There’s no doubt that the service offered to occupiers needs to be highly tailored. As Rachel said, not all occupiers even know what they want. Flexibility reaches everywhere, from deals, leasing and revenue management to the building itself. And while modularity is a great concept, it takes time and the right technology to install in practice.
Brandon noted that in a conventional building the most underutilised space is also the most expensive. The beauty of flex is that it makes this space shared (for example kitchens and conference rooms). But construction technology hasn’t yet developed to enable us to knock down and re-erect walls quickly.
James compared this with advances in technology: “For example, doors now come with built-in electronic locks, which removes a great deal of cost.” The fact is we need innovative, prefabricated, standardised interior components. You cannot manage the new normal with old tools. James recommended a global strategic approach to technology and security when rolling out flex.
Shared versus individual
Rachel explained that flex space providers such as Industrious offer a mix of conference rooms, including small exclusive spaces and large shared ones. Some tenants have their own cafés, while others share.
James observed that this means enterprise occupiers need systems that enable them to book out their own space as well as shared amenities. New tools will enable them to integrate both systems, make room bookings automatically through their normal Outlook or Google applications and choose their desk for the day.
As Brandon said, landlords can’t manage the supply of space at short notice, but (following the Uber model) they can manage the price. Sensors are great for understanding what’s happening now, but alone they can’t predict product demand tomorrow. For example, having more developers on site does not usually lead to more demand for conference rooms, as they tend to work individually at a single desk each. However, having more marketers – who prefer group working – does. Therefore, we have to deeply understand individual needs.
The big disconnect
As the panel reached the end of their discussion, they gave examples of mistakes people often make. Brandon said that one major misconception is that flex is about headcount growth. In fact, this is difficult to manage and requires better expectations, longer lead times and more notice. For now at least, it’s more effective to think about underutilised components.
Rachel observed that, while it’s tempting to believe that the big return to the office means we have to catch a huge wave of variable demand, in fact people quickly settle into habits, making work patterns more predictable than you might expect.
Meanwhile James was skeptical about the value of many tenant engagement apps, which in fact offer more to landlords than tenants. “If you’re not using it almost constantly, do you really need it?”
Finally, Franco asked each panellist to make a single prediction for the new flexible way of working. According to Brandon, occupiers will adopt flex models faster than landlords – and they’ve already started. James forecasted that AI will make us better at predicting demand and will help create intelligent spaces. And Rachel was confident that landlords will accelerate the changes they need to meet this new, lucrative market.
Tune in to the full conversation here.
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