If A Landlord Doesn’t Use The Right Tools, Its Property Won’t Make A Potential Tenant’s List Of Options
The pandemic and wider economic landscape have created a market of choice for office occupiers. Office availability is at its highest level in 15 years, though take-up is reportedly back to pre-pandemic levels, and many businesses are still rethinking their real estate footprint. For a business looking for a new workspace, the list of potential spaces is long.
This creates a challenge for landlords: How can they make sure they are on that list of options presented by agents?
“It’s about using speed and accuracy to stand out,” said John Campbell, senior director at real estate software company VTS. “The irony is that we are heading towards recession, when marketing budgets will inevitably be cut. It’s more important than ever that landlords use the tools available to get in front of tenants and agents.”
A Market Of Choice
The high availability of space on the market in London is partly due to a shift in working patterns, Campbell said.
“The pandemic forced a tricky conundrum for businesses — does working from home equate to productivity?” he said. “It changed perceptions about how productive people were when working from home. Businesses realised that, providing they plan and set up working practices effectively, this is a real opportunity. But it has created many questions in the office sector.”
Hybrid working has led many businesses to rethink how much space they need, if people are working from home much of the time. It has also brought more flexible space options into consideration.
“It’s no longer a question of whether to have flexible space as part of an overall footprint, but how much,” Campbell said. “So now businesses have an even greater range of options to choose from.”
As well as how much space businesses need, the pandemic significantly influenced how occupiers find space. Virtual tours became essential when travel was halted. Without the ability to win a potential occupier through an in-person meeting, it became more essential to put together an appealing financial offer.
This move to online has sped up the whole process of leasing space, Campbell said. However, landlords that weren’t prepared for this shift were exposed by the increased importance of providing timely, accurate information.
“The real issue for agents and potential occupiers occurs where there is scant information available online,” he said. “They might have to ring someone up to find out when a space is available or confirm the size, which adds delay. In a market with lots of options, the danger is that a property won’t make a shortlist if this information is not to hand.”
Where To Find Speed And Accuracy
This is where technology can step in, Campbell said. Today, a landlord can use software to input details about available space and automatically feed this into marketing collateral and listings or create reports for agents. It can be updated to provide real-time information, so an agent won’t have to pick up the phone to find out if the listing is accurate.
“Agents face the problem that they are told a property is available, but a record just hasn’t been updated in a few days — the property is actually under offer,” Campbell said. “This goes down very badly with potential clients. Today, we expect things to be up to date — flight prices and availability, for example — but commercial real estate is behind in using technology.”
Once a potential occupier is interested, technology can aid the lease negotiation process. If an offer is made, a landlord then creates a cashflow, which in the past has been a lengthy process full of human error, Campbell said. Each time the offer is amended, a new cashflow must be created.
Software, however, can generate this cashflow instantly once details of the offer are inputted. The technology can handle all possible permutations of an offer to lease an office, as all leases contain different rent-free periods or rental uplifts, for example. The result is huge time savings and increased accuracy.
“Landlords need to embrace technology — it’s there to be used,” Campbell said. “In the market, there’s a perception that using technology will phase agents out, but it never will. Agents will always be needed to lease and acquire space, because people wouldn’t make a £10M decision based on technology. But speed and accuracy can be seriously improved.”
This article was produced in collaboration between VTS and Studio B. Bisnow news staff was not involved in the production of this content.
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