Commercial real estate needs to evolve in order to stay relevant
Season 3, Episode 1 of the #WorkBold podcast
“It doesn’t matter what the capital markets or landlord community wants, customers want flexibility and service, so if you’re in commercial real estate you need to evolve in order to stay relevant.”
Listen below, or open in your podcast app by clicking here
David Cairns, Senior Vice President – Office Leasing for CBRE in Toronto, Canada, joins Bold Founder Caleb Parker to challenge commercial real estate to bet on Space-as-a-Service.
He says it doesn’t matter what the capital markets or landlord community wants, customers want flexibility and service, so if you’re in commercial real estate you need to evolve in order to stay relevant.
He believes “Space-as-a-Service should be part of every office landlord’s leasing and retention strategy”.
In this episode you’re going to learn the difference between flex and Space-as-a-Service, some details about 3-way deals transacting between landlords, customers and operators, and how asset owners can make their buildings more attractive for high quality occupier customers.
Finally, Dave helps us understand how it makes sense for Space-as-a-Service to become less risky for landlords, yet still save customers money.
Connect with Dave on LinkedIn | Connect with Caleb on LinkedIn
What you’ll learn
- The landlord community isn’t providing enough Space-as-a-Service to meet customer demand
- Enterprise technology customers are starting to partner with flexspace operators, and are approaching landlords in tandem to transact deals
- This type of deal enables the customer to take the long lease required by the landlord, but offset the cost liability of having too much space before they grow into it
- These enterprise technology companies are comfortable managing risk in this way, whereas the landlord isn’t
- Landlords need to embrace these deals and make it easier to facilitate provisions for this in the terms of a lease
- But this should be a leading indicator for the landlord community as to what customers want. Not all companies can do deals like this, but many want these same benefits
- Landlords need to partner directly with Space-as-a-Service operators to solve problems for occupiers
- Otherwise, the customer ends up in unfavourable sublease terms
- Landlord-operator partnerships are more sustainable relationships that create stable pricing models for the customer
- The agent community has a lot to gain by brokering more Space-as-a-Service partnerships between landlords and operators
- There is a difference between flex and Space-as-a-Service; flex is a feature of SPaaS
- Space-as-a-Service should be part of the leasing and retention strategy at the outset for new developments
- Bringing in a high calibre operator makes a building more attractive for high-quality occupiers
- Regardless of what the capital markets or landlords want, customers want flexibility and service, so commercial real estate needs to evolve in order to stay relevant
- Landlords needs to think about service and hospitality holistically
- Amenities should be revenue drivers, not line items in the service charge