COVID-19 has changed the commercial real estate market, setting a new destination for the future of the workplace. For landlords and property managers, the ideal customer is no longer the tenant — that is, the key decision-maker in a company — but the individual. Collectively, company employees will reshape the office into a consumer product, based on their usage habits and behaviours. And if the office does not meet their needs, they will simply work remotely.
The global commercial real estate market is now working rapidly to meet this emergent demand. This means changes to services, amenities, technological solutions, and leasing terms. It will also mean changes to the traditional role of the commercial property manager.
Here are some of these possible changes.
Commercial property managers embrace flex space
When the majority of people are fully vaccinated, many will choose to return to the office on a part-time basis. Some companies, therefore, will no longer require long and expensive leases. They will instead opt for space-as-a-service arrangements, where they can pay for the space that they need on a short-term or even ad hoc basis. Under the space-as-a-service model, companies can also custom-build service packages with the add-ons their employees want, such as gym memberships or access to select amenities.
The commercial property managers of the future will work with companies to create agile, flexible leasing arrangements. They will spend a portion of their time creating bespoke packages for companies, using the services and technologies at their disposal. And, according to Deloitte in its 2021 Commercial Real Estate Outlook, they will do so using tenant or workplace experience technology.
The integrated workplace experience suite helps property managers to:
- Maintain tenant relationships
- Communicate with employees
- Switch services (such as access control or e-commerce) on and off, as needed
- Provide smart data on building occupancy and Indoor Air Quality (IAQ) directly to tenants and employees
- Coordinate activations and community events
- Coordinate property management teams to provide services to tenants
As they do today, commercial property managers will maintain long-term relationships by ensuring services are provided in a satisfactory manner. Soon, this will mean capturing data on the usage of services and amenities, as well as customer sentiment, so that both asset and property managers might improve their range of offerings and better compete with other flexible space providers.
Smart building data for commercial property managers
To ensure that the office remains a valuable option for companies, property managers will need to prove that their assets contribute to health, comfort, safety, and productivity. They will do this with the use of smart building technology.
Smart building technology, and the data it captures, will help property managers to:
- Regulate Indoor Air Quality (IAQ), including CO2 and oxygen levels
- Regulate heating and cooling within tenancies and common areas
- Monitor and improve sustainability standards (such as carbon footprint and electricity usage)
- Pass insights directly to companies and employees, giving confidence and peace of mind
And more. We've talked before about the benefits of smart building technology to productivity. It is possible for property managers to prove that the workplace is more productive than remote or home offices — for example, by showing a reduction in CO2 presence — and in doing so, they will add a new and attractive value proposition to their assets.
Commercial property managers will lead the way with ESG
Sustainability has been a hot-button area of focus for property managers over the last 10 to 15 years, at least. With the introduction of new technologies - such as the smart building solutions discussed above - property managers will have more control over their sustainability and ESG initiatives than ever before, resulting in higher goals and more comprehensive benchmarks.
A vital part of managing sustainability in a commercial office building is visibility and cooperation.
Tenant experience platforms help property managers to get the best results by:
- Communicating ESG and sustainability initiatives to an entire building population, rather than just key tenant contacts
- Providing real-time results against goals and benchmarks
- Enlisting tenants and employees to get involved with initiatives through community engagement (e.g. environmental awareness activations)
- Gaining feedback directly from tenants and employees on sustainability initiatives, including ideas for new projects
And more. Research shows that millennials are highly-focused on sustainability, particularly energy efficiency. The property managers that actively promote their ESG and sustainability initiatives will secure longer-term relationships with the next generation of company decision makers.