The COVID-19 virus changed so many facets of our lives forever. At the outset, most of us were optimistic, we all hoped that we would be able to bounce back to the world we knew before this deadly disease started to spread. But as the pandemic persists we all seem to be getting a sense that things will never return to the way they were. Some of the changes that we have to make to keep us safe will become engrained. Remote work will likely always represent a larger part of the employment landscape then it ever did before. Companies may need more space for proper distancing between employees. Food delivery will be a dinner option for many that never considered it before long after the pandemic is done. None of us will ever look at facemasks the same.
Many of the changes happening in commercial real estate will also never go back to its pre-pandemic state–but is that a bad thing? Traditionally, the leasing process included walkthroughs of numerous properties to help future tenants figure out what is available. Now that is simply not an option, nor is it desirable.
“Virtual tours are just table stakes at this point,” said Nick Romito, co-founder and CEO of commercial leasing platform VTS. “Eighty-two percent of tenants are not comfortable touring space in person. If you are not able to provide a digital way for people to understand space, you can’t even play the game let alone win,” he said. Touring dozens of locations to find a suitable office to rent might be one of those practices that we jettison forever. “I have heard about tenants that have had to tour over fifty locations before they find a suitable one,” Romito said. “You would never see this anywhere else, people would never go to fifty different dealerships to buy a new car.”
In-person visits to properties are not the only inefficiency in how properties are (were) marketed. Most leasing teams rely on bulk emails, cold calls, and in-person events to share new listings with tenant rep brokers. “The ‘spay and pray’ approach is not going to last. Only about three percent of property marketing emails get opened, cold calling has an even lower success rate,” Romito explained.
Bringing more of the marketing process online gives landlords and brokers the ability to be much more targeted with their messaging. VTS just rolled out a new marketing solution, VTS Market, that they think is going to bring marketing and leasing availabilities into the digital era. The new platform, which has already been adopted by national owners including Tishman Speyer, Brookfield Properties, Empire State Realty Trust, Hines, Oxford Properties Group, and RXR, enables landlords to market and lease their spaces online from within the VTS platform they use to manage their leasing and asset management activities today. In one click, agency leasing teams can review, approve, and publish spaces online to the VTS Marketplace, a listings site exclusively for tenant reps to view, tour, and share virtual listing content for free. Additionally, landlords can easily publish spaces to their own websites and email listings to their network of tenant reps, directly from VTS.
And each listing on the marketplace features comprehensive digital marketing content produced by the VTS team including video tours, virtual tours, photos, 3D space renderings, refurbished floor plans, ensuring tenant reps and their tenant clients can virtually experience a space without having to conduct numerous in person tours. Instead, they can narrow down their shortlist and visit their top preferences, resulting in a more efficient experience for all parties involved in the leasing process.
One of VTS’s goals is to provide more than 250 accurate data points for every space marketed on their marketplace, to ensure tenant rep brokers are viewing a single source of truth that they can trust. “We want to start cataloging space for lease just like Nike catalogs their shoes,” Romito said. Capturing features like ceiling height, noise level, daylight, column width, and amenities will ensure tenant reps can search and filter spaces by specific, in-depth tenant requirements. These characteristics can also be used to analyze prospect interest, helping leasing teams understand what types of spaces each lead is most likely to engage with.
We want to start cataloging space for lease just like Nike catalogs their shoes.
Nick Romito, Co-founder and CEO of VTS
This newly available data can help inform offline interactions as well. If a certain space gets multiple engagements from a prospect, it is a good signal that it is time to pick up the phone and give them a call. The human element behind leasing will not go away, it will just be augmented with more much data-driven insight.
Marketing a property is only a part of the journey to closing a deal. The final stretch is the negotiation. There are so many facets to each lease like price, term, tenant improvements, common area maintenance, and concessions that all need to be agreed upon. By analyzing the data, landlords can come into a negotiation with a much better understanding of the client’s demand. “We have had a broker tell us that while in a negotiation they saw the virtual tour views go from a few dozen to over two hundred,” said Romito, “that told them that the property was being looked at by the entire management team and so they knew they that would likely not need to make a concession since the company was already preparing for move-in.” With VTS’s new features, landlords can track real-time analytics that show how tenant rep brokers and their clients are interacting with a space in the very same platform where they manage their leasing process. This information enables them to understand how their online activity is converting into actual deals within their VTS leasing pipeline, and proactively course correct if necessary.
Tech adoption often has a tipping point. Once a technology has been able to prove its worth, there is often no going back. This pandemic has been a tipping point for a lot of changes in our lives and our business. The convenience that online marketing technology provides all parties of a deal, from landlords marketing space to tenant reps looking for space on behalf of tenants, will not be forgotten. The pandemic has put a strain on commercial real estate, but that very same pressure will also be what makes it more innovative, adaptive, and efficient.