One of the first lessons you learn when you start representing owners and tenants in leasing office space is that the tenant rules. They drive everything. Rates, Tenant Improvements, where buildings get built, what buildings get built — everything. Deloitte produced a very nice 2020 Commercial Real Estate Outlook (the link to the entire study is below my signature). I found a number of items very thought provoking for this narrative.
In the coming decade, here are some items to keep in mind as you lease office space:
- Tenant experience is a top priority—While tenants have always ruled, now their experience at the building will be even more critical. Building amenities, how management responds to tenants, the speed of response will all play a role
- Commercial real estate market changes are coming fast and furious. These changes will offer new opportunities for employees and for organizations to attract and retain talent using data science and analytical capabilities, as well as retool and re-skill the existing pool so they have the right skills. Don’t be a dinosaur.
- Cyber-security and tenant data privacy becoming top priority. Unsurprisingly, everyone is worried about their cypersecurity. I am not sure how to handle this, just bringing up the point and hope you all will help me if you can.
- The U.S. is lagging in smart buildings. This will change as we continue to see more and more tenants demand stacked elevators, individual climate controls, etc.
- AI—Artificial Intelligence in leasing office space is being touted for all corporate real estate directors. One company I am involved with, Leonardo 247 is using AI to scrape data from city code to help Multifamily property management stay in compliance.
Below is one chart from the study. You can see the top four items that tenants say would improve their experience.
Disruption comes in many forms. Taking care of your tenants and making their experience incredible is critical in today’s market and heading into the future.
Click here to read the whole report.