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The New Digital Office Experience

Every economic crisis causes us to rethink things that had previously been taken for granted. We are currently witnessing this in commercial office space. There is an ongoing debate about whether the office space is dead or not. While there has been a lot of noise around companies moving to a remote working first policy, property owners, and their teams have been quick to emphasize the importance of a physical space. Whether it be collaboration or wellness, the office industry is attempting to attract tenants whose attitudes towards office space have shifted almost overnight. 

As much as this has been a setback for the office industry, it also represents an opportunity. With occupiers in the driver’s seat of the conversation, we finally have the right catalyst for the digital transformation of commercial office space across all stages of the leasing lifecycle. Take virtual tours for example, in almost all sectors of real estate they went from nice-to-have to essential marketing tool overnight. Buyers won’t give back the efficiency they provide once the pandemic subsides. 

By digitizing everything about the physical office from the way they are leased to the way they facilitate employee interactions, property teams can begin to create solutions that add value to the office occupier experience. Property owners that embrace their new role as digital landlords will shape this new era of office space and rethink everything from how tenants use the space, how offices are designed and finished, to how they are marketed and leased.

Gone but not forgotten 

Let’s start with the most significant impact to office space—the sudden shift to working from home, leaving office space around the world empty. Organizations of all sizes are announcing the support of remote work indefinitely, flooding markets with subleases, and reconsidering their real estate footprint. Remote working models are proving successful in the short term, but as employees crave a space for team collaboration and work-from-home-fatigue sets in. Hybrid working models will likely win out for the longer term. As employers shift from a headquartered office approach to more of a collaboration hub, workspace access and management become critical.

Digital office capabilities can help teams define and manage workspace access and usage. With a digital twin of their office suite, occupiers can set policies such as capacity rules and health and safety guidelines, and offer their employees interactive and spatially-aware tools for scheduling access to the physical, IRL office. The ability to set, communicate and manage health and safety policies for individual office suites as well as the larger building makes the policies easier to adopt. Digital communities that connect tenants to best practices, to the property team, and to each other build property transparency and increased confidence in the teams using the space.

Deploying these sorts of digital office capabilities also produces insights for property teams on how occupiers are using their space today as well as where and how much space they will need months or even years into the future. Over time, this can inform the timing and strategy of renewal conversations where the property team can recommend upsizing, downsizing, or staying put based on the needs and usage patterns based on an aggregate of other tenants with similar patterns.

I recently met with one property management organization that is currently evaluating technology standards for its dozens of office properties in an effort to streamline communications with occupiers. They highlighted customer experience as a differentiator in order to attract new tenants and so as part of this effort and are proactively reaching out to occupiers to understand their concerns about returning. This has allowed them to recommend workspace management techniques and technologies to help them use their spaces safely. It also gave the company important feedback that directed their rollout of new amenities and a communication platform that connects the property community together in a way that a static web site wasn’t able to do for them previously. They are confident this customer-centric approach will pay off in terms of new leases, renewal rates, and property enhancements.

Owners and their property teams need to take steps now to connect customers to resources, technology, and the broader property community to build stronger customer relationships. The first step is to audit tenant interactions and determine how those can be integrated better to support community wellness. Further, they should understand what digital capabilities occupiers are already using to manage and communicate with their teams so they can meet their users where they already are. Whether it is rolled out through the property team or its bring-your-own-tech to manage your space, digital landlords should think through what they are prepared to support. New processes require new skills and so property teams will have to figure out how to provide that level of support and communication. 

Backup (floor) plans

Almost overnight, the pandemic has caused occupiers to rethink their use of physical offices, and landlords to recalibrate their plans for the types of office spaces and amenities they offer to their current and future customers. Some occupiers may want to take advantage of decreasing rent prices to upsize their office space with decreased density and furniture layouts that accommodate social distancing. Many others may look to downsize their footprint to operate the space as a touchdown collaboration hub for teams to access on a part-time basis.

Not only do property owners need to address property safety and wellness concerns, but savvy ones will also help their customers and prospects think about how different types of office space can meet their changing needs going forward. This will require property owners to manage a shifting mix of office product offerings in various sizes, layouts, and lease terms in a portfolio.

Property owners and their teams can leverage virtual models to prototype a variety of tenant improvement options, build the cost into the monthly rent, and use digital outreach capabilities to market those options before any money is ever spent on construction. With a digital model of the office suite, potential occupiers can toggle through the different space choices in real time to try them on for size either online or on a mobile device while physically standing in the space even though it may exist in a different condition. Much like you can build and price a car online, this enables prospects to visualize office layouts, furniture arrangements, different finish-out choices and understand what they want and need out of their office investment. 

At the same time, pre-configured build-out options help property teams to better plan and control tenant improvement costs as demand changes. And, as tenants seek out increased flexibility with their real estate options going forward, this becomes even more critical as owners will need capabilities to scale office configuration planning and change across an entire asset or local portfolio.

Digital office planning can even be used as an incentive to build relationships with existing tenants as a means to get them back to using their current space or even extending their current lease. A global REIT is using virtual models to proactively offer layout consultations that optimize for social distancing and opening up conversations on changing office space size and needs to drive renewal conversations. 

Owners and their property teams should evaluate ways to pilot virtual capabilities to assist in office planning and design. Identify an asset or a few floors of an asset where improvements are needed but use a virtual model to showcase the space as it could be both in online promotions and during in person tours. Use time to lease, vacancy cost reduction, and overall lease transaction costs should be used to evaluate if the pilot is improving performance through better planning upfront.

Flex space means flex leasing

The desire for office flexibility existed before the pandemic, but the pandemic has made it an absolute requirement for owners and operators overnight. Agile work strategies are expected only to increase across companies of all sizes growing the demand for flexible workspaces. In fact, JLL predicts that 30 percent of all office space will be consumed flexibly by 2030. Yet previous forms of coworking spaces may not be the best answer to this need in a post-pandemic world as many teams look for private team spaces that can be better designed and managed for safety. Agile workspace will force leasing teams to rethink their entire leasing business model from the amenities they feature, to how they price and structure the agreement, and even how they market and promote their properties.

Offering more leasing flexibility will increase the number and the frequency of transactions while it shortens the time to execute them from months down to weeks or days. As a result, digital leasing will go beyond a photography-based virtual tour to support digital negotiations and contract execution. Augmented or virtual office reality can offer visual interactivity to assess options and potential of an office space much more completely, thus eliminating weeks of delay coordinating in-property meetings with architects, contractors, and brokers. When paired with intelligent negotiation and contracting tools, buyers could easily configure how much space they need, what amenities or services they need, and for how long they need them. This digitally-assisted leasing experience also signals the need to target and engage tenants directly and expand beyond the traditional local tenant broker outreach. All of this ensures that leasing teams are spending the time with the right prospects and tenants based on the level of support that they require.

An Austin-based property owner I spoke with is currently experimenting with the promotion of available, smaller spec suites as business-ready, optimized for safety, agile spaces available on monthly terms. They are employing this strategy to entice smaller technology start-up teams that may be looking for touchdown spaces to collaborate but aren’t able to commit to anything long term. They are also exploring cleaning and reservation protocols to support potentially part-time monthly agreements across more than one team.

For many property owners and their teams managing a turnkey office operation will require new skills to support. First, consider if this is a skill set that is best served inhouse or if a partner is better suited to help launch and manage operations. It can’t just be a sales and marketing afterthought—a pilot should be given full attention and the permission to try new tactics to promote and engage prospective tenants.

Customer as compass

Digital transformation of any industry aims beyond just making digitizing current processes and practices. It involves rethinking the products and processes from the ground up with the customer experience as the north star. Digital office capabilities have the power to unlock a superior experience with the physical office product and supporting services. Property owners and their extended teams will not only need to adopt new PropTech to ensure building health and safety, but also to better understand customer needs and directly respond to those changing needs.

Finally, customer experience can only be improved if it can be measured and someone is accountable to improving performance over time. Go beyond informal tenant anecdotes to online surveys that standardize feedback on a regular cadence—it’s a great way to get timely tenant information before it’s ever a bigger problem. Property owners and their extended teams will need to determine exactly where that customer experience ownership resides whether it fits within existing team structures or if new team alignment needs to take place in order to properly assess, support, and improve all customer interactions with the physical property, digital property, and human touchpoints.

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Propmodo is a global multimedia effort to explore how emerging technologies affect our built environment.

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