Category: Building Success

Building Success: Savvy Owners

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Building Success

How Savvy Commercial Property Owners and Developers are Proactively Reassessing their Real Estate Investments

Posted by Kai Thompson  |  November 10, 2020

Preface

The idea of Building Success should be viewed as both an action and an outcome. The action(s) being innovation + continuous improvement of indoor workspaces, and the outcome(s) being improved performance + productivity of our workforce. As discussed in The Space Between, due to the current challenges presented by COVID the Commercial Real Estate industry is experiencing a push toward Healthy Buildings as a standard. In the end, the true objective is not just to have healthy buildings, but healthy people.

(Physical office space) will need to meet new demands including healthy building amenities and more space designed for collaborative work, as well as formal and informal meetings with colleagues.”

Vincent Raufast

EY Consulting Assoc. Partner

The adverse economic effects of the pandemic have put commercial property owners and developers under immense pressure to get spaces leased and projects stabilized even as many companies continue to pause on making major capital decisions. With remote work policies becoming more the norm rather than the exception, many have also speculated about whether overall office demand will decrease as a result. Despite these valid concerns, a September survey by the corporate real estate organization CoreNet Global found that office space is expected to remain the locus for team collaboration, employee onboarding, talent management, and business development. Here we look at how today’s savvy property owners are navigating uncharted waters by maximizing the performance of their current assets, identifying new investment opportunities, and restructuring their portfolios to minimize risk.

1. Maximizing Performance of Current Assets

For many companies, the cost savings of remote work doesn’t eliminate the need for physical office space. In fact, the physical office has a greater role than ever to play in establishing and maintaining corporate cultures, effective talent management and retention, and creative inspiration.

In a world full of unknowns, the desire for flexibility remains constant. Owners and developers that embed this element into their real estate strategy are setting the stage for stronger, longer-lasting relationships with their tenants.

Traditional incentives such as periods of free rent and increased tenant improvement packages will do little to rival safety concerns. Emphasis is better placed on touchless bathroom fixtures, self-opening doors, common areas that allow for social distancing, and other features and amenities that at once address current concerns while having post-pandemic appeal. Other considerations include air purification systems, micro-filtration in the HVAC system and ultraviolet light cleaning procedures.

2. Utilizing Location as a Corporate Strategy

While it’s unclear whether occupiers will need less real estate overall, where an occupier’s office space is located may change in response to COVID. With safety, quality and geographical location continuing to be important selling points for attracting and retaining talent, many businesses are likely to follow the workforce talent as they relocate to the suburbs.

Having experienced positive results with working from home, many organizations find themselves at a turning point with how they think about commercial spaces. This has shifted the focus on office real estate from dense, urban or centrally located business districts to a broader range of alternatives, including a “hub-and-spoke” model comprised of a higher quantity of smaller offices in suburban locations. This more distributed model would:

  • Bring businesses closer to job seekers or other talent pools.
  • Bring organizations closer to their clients or customers—even present options for co-locating with them.
  • Better support employee performance and organizational resiliency.
  • Contribute to the improvement of local communities as well as the urban landscapes throughout various geographic regions
3. Minimizing Risks

Due to the mass market disruption caused by the pandemic, many organizations are reassessing their cost structure and options for minimizing or mitigating cost associated risks. Meanwhile, offices across the globe are under-occupied as millions of corporate employees work from home. Many organizations are now choosing to streamline their operations and reduce overhead costs in order to better weather the storm financially, with hopes to come out stronger than they did going into the pandemic. As a result, many are looking for ways to downsize their corporate real estate footprint.

After decades of focusing on the development of central cities, it might be time to challenge everything we thought we knew and widen our lens beyond big new developments in urban cores to include walkable suburban developments nearest to those that do the work. The shift from company offices that occupy multiple large floors in a single building to a series of distributed nodes throughout multiple locations would mean more mixed-use commercial buildings that serve a truly diverse cross-section of industries and workers. This approach would facilitate more high-quality connections, essential for strengthening existing teams and creating new relationships within and among organizations – a highly desirable and cost-worthy benefit for any tenant.

Here to Help You Succeed…

Splice offers a suite of services built for the day-to-day, long-term, and anything in-between. We’d love to discuss how we can help bring your organization’s vision to life.

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Building Success: Tenant Retention

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Insights and Information from Splice

Building Success

5 Future-Fluid Approaches to Tenant Retention & Attraction in the Age of COVID

Posted by Kai Thompson  |  October 27, 2020

Preface

The idea of Building Success should be viewed as both an action and an outcome. The action(s) being innovation + continuous improvement of indoor workspaces, and the outcome(s) being improved performance + productivity of our workforce. As discussed in The Space Between, due to the current challenges presented by COVID, the Commercial Real Estate industry is experiencing a push toward Healthy Buildings as a standard. In the end, the true objective is not just to have healthy buildings, but healthy people.

The extent of future impacts depends on what we do now.”

John Holdren

Speech at Harvard University Center for the Environment 3.21.2017

In commercial real estate futureproofing is best described as the development of risk mitigation methods in anticipation of adverse future events. Prior to the Pandemic, such efforts included tactics like increased energy efficiency, the imbedding of technological advancements, and variable responses to green building initiatives. While the current health crisis has clearly shown how ill prepared the CRE industry was to absorb such adverse economic impacts, it has also given us the opportunity to be more fluid in our approach to futureproofing our investments in the built environment. In order to assure our industry’s survival, we must foster more effective means of collaboration that not only capitalize on current trends but set the stage for us to thrive long after the current crisis has abated.

Here we look at 5 future-fluid approaches that workspace owners, landlords, and managers can use to maximize tenant retention and attraction.

1. Work Together

Even as new CRE management practices and technologies are being born from this necessary time of innovation, many challenges still exist in the relationship between facility stakeholders (owners, landlords, and managers) – each having different and sometimes competing goals. From ensuring the smooth day-to-day functioning of the built environment while meeting the real-time needs of tenants. To overseeing the investment and profitability of the entire building while mitigating risk and liability. To meeting financial targets tied to each building’s long-term performance. People usually have a stronger buy-in when they are included in the implementation. By openly sharing performance goals and working together to develop H&S protocols and risk mitigation strategies, buildings can function at optimal levels due to a shared understanding.

Consider This… 360 Facility Feedback

In this process, the stakeholder team receives regularly scheduled feedback on the building’s performance. Facility managers would see how current building needs translate into concerns or benefits for landlords and owners. Landlords see the benefits from or impacts to the facility manager’s day-to-day functioning, as well as any notable risk, liability, or cost concerns and how they affect the owner’s investment goals. Owners get to see not only how their building is performing, but the cause and effect relationship between their long-term investment goals and the efficacy of their landlord and facility manager team.

2. Trust + Transparency

In previous times, tenants and facility stakeholders didn’t always share or participate in a consistent message or unified plan. From building improvements and increases in rent, to new maintenance protocols and H&S initiatives, inclusion is a reasonable expectation. By informing tenants about what’s happening in their building – the different procedures being put into place and what the process will look like – you not only build trust but provide a sense of security and level of ownership as well.

Consider This… Automated Monitoring + Reporting

What COVID responses and the current social climate has shown is that daily reporting in a central location helps deliver consistent messaging and increases the level of trust. This can be accomplished by creating a customizable dashboard – accessible by tenants and facility stakeholders – to provide updated information on air quality, contact tracing, cleaning + disinfecting.

3. Flexibility

Historically, when negotiating lease terms, the goal between tenant and landlord/owner was to lock into a 5 to 10-year contract under a pre-determined amount. This model insured a fixed cost for tenants and a dependable revenue source for owners. Tenants who could confidently commit to these agreements had business plans and revenue models that more than supported such a sizeable investment. However, we are now in a time riddled with numerous unknowns and businesses are being reasonably cautious.

Consider This… Variable Space Utilization Options

None of us knows what tomorrow holds or how our use of space might shift and evolve yet again. While workspace owners and landlords will have to choose what approach suits them best, offering multiple options will help maximize occupancy by diversifying their tenant pool. Solutions might include short-term leases, options for subletting and shared workspaces.

4. Cost vs. Benefit

Once based solely in metrics such as price per square foot, maintenance costs, and operational overhead, a cost-benefit analysis must now also consider whether a specific space provides benefits that minimize a newly inherent risk – an unhealthy workforce. This shifts the conversation from space generated revenue to tenant retention and attraction by exploring what a profitable space looks like in the future.

Consider This… A Healthy Workforce + Enhanced Space Performance = Sustained Profits Over Time

By enhancing overall health and safety of the built environment, space performance becomes a tool that effectively serves both current needs while increasing future profitability. To that end, desirable amenities would include touchless technology to support a mobile experience for tenants, destination dispatch for visitors, and door-to-desk tools for employees.

5. Ease of Protocol Implementation + Maintenance

In the age of COVID, the need for streamlined and efficient communication processes has become more urgent than before. As the need for safety procedures increases, i.e. health screenings and contact tracing, so does the need for timely communication in order to safely proceed with typical business.

Consider This… Tech at the Outset

The successful implementation of building protocols depends heavily on how easy it is for tenants to participate in once established. A useful solution would be an integrated, tenant-accessible dashboard capable of tracking space performance and utilization, cleaning and sanitizing measures, maintenance and repair requests, and exposure risks. In conjunction with a comprehensive onboarding process where tenants can get all their questions answered, gain familiarity with building amenities, and understand what data is collected, this approach would ensure compliance and streamline issue resolution.

By working TOGETHER, workspace owners, landlords and managers can better meet the needs and wants of tenants and establish a foundation for building success.

Here to Help You Succeed…

Splice offers a suite of services built for the day-to-day, long-term, and anything in-between. We’d love to discuss how we can help bring your organization’s vision to life.

Get In TouCh

Building Success: Workspace Optimization

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Insights and Information from Splice

Building Success

3 Workspace Optimization Strategies for Owners, Landlords, Managers, and Tenants

Posted by Kai Thompson  |  October 13, 2020

Preface

In addition to safeguarding the wellbeing of their people, organizations now find themselves striving to keep pace with the sudden acceleration in the advancement of workplace technology. To establish new business models and management practices that not only integrate the use of these technologies into their workforce but govern how people adapt to and work in partnership with the technology available to them.

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

Sun Tzu

The Art of War

The idea of Building Success should be viewed as both an action and an outcome. The action(s) being innovation + continuous improvement of indoor workspaces, and the outcome(s) being improved performance + productivity of our workforce. As discussed in our earlier article, The Space Between, the Commercial Real Estate industry is experiencing a push toward Healthy Buildings as a standard. In the end, the true objective is not just to have healthy buildings, but healthy people.

We Must Begin with the End-User in Mind

When it comes to workspaces, the true End-Users are the employees that inhabit the spaces we build. How much do we know about our end-users? How much of our building design is tailored to what we know and/or understand about their needs, wants, and concerns?

As many people are gearing up to go back to work, they may have noticed a lot of new procedures in place to protect their health and safety. Some of them are easily implemented by owners, landlords, and facility managers but prove inconvenient to tenants and their employees.

1. Convenience

In the time of COVID, convenience can be a well-planned process that gets occupants through the door and to their workspace quickly and easily without compromising safety. Convenience can be easy access to actionable data to inform contract tracing, air and water quality, occupancy counts, and energy use. Convenience is scheduled and on-demand cleaning protocols that effectively demonstrate space readiness.

A useful strategy for building in convenience is to anticipate the variance of priorities between stakeholders, i.e. Owners, Landlords, Managers, and Tenants, and how those disparities ultimately impact employees.

For example, the use of high-level screening might be a convenient solution for a landlord but prove inconvenient for the tenants and their employees by adding 30+min to entry time, and for the facility managers responsible for staffing each entry point. A reasonable solution (or tactic) would be the use of touchless health screening kiosks that allow for quick and easy screening while minimizing virus transmission.

2. Reasonable Levels of Comfort

As people go back to work, comfort in the workspace will be realized by easy use of prescreening technology, low or no touch in person screening procedures, and social distancing signage and wayfinding. Comfort in the workspace will be maximized by space scheduling, reimagined collaborative spaces, and ample space allocated for employee wellness.

A useful strategy for maintaining reasonable levels of comfort is to anticipate multiple workflows by building in flexible options that give employees choices on how to safely interact with the space around them.

For example, traditional workflow models might maximize space utilization and minimize energy consumption, but with current social distancing needs, this approach is no longer feasible. A reasonable solution would be to double or triple your building’s turns of fresh air per hour. Such an approach wouldn’t necessarily cost much more in equipment, but it would increase your electricity bill.

3. Perception of Safety

When we begin with the end-user in mind, we should think about how they perceive their safety as they return to work. Their perception is based on how successful organizations are at communicating and enforcing their workspace safety protocols. Perception of safety is built on the clarity and transparency of the plan.

A useful strategy for increasing the perception of safety is the development of standard operating procedures that are easy to access (i.e. via website and apps), building wide communication that is clear and concise, and other messaging designed to increase employees’ confidence while in the workspace.

For example, while an alternating or staggered work force might help with social distancing it can degrade communication by compromising the consistent delivery of up to date safety information. A reasonable solution is utilizing indoor location and data platforms to not only track occupancy, proximity, and spacing, but use real time updates to communicate changes in workspace protocols. This added information helps to ensure compliance and ultimately increase the perception of safety.

By beginning with the end user, organizations can establish a foundation for building success.

Here to Help You Succeed…

Splice offers a suite of services built for the day-to-day, long-term, and anything in-between. We’d love to discuss how we can help bring your organization’s vision to life.

Get In TouCh

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