'You Are Partners With Your Tenants Now': How The Pandemic Has Changed The Landlord/Tenant Relationship
As the coronavirus pandemic continues and companies work to figure out the future of their offices, prominent LA-area office landlords and brokers say that the current climate has forced changes in the ways landlords and tenants interact.
“It’s a different relationship. You [landlords] are partners with your tenants now,” said Silverstein Properties Head of Acquisitions Jeff Grasso at a recent Bisnow webinar. “As a landlord we have to think about how to get people back into the office on their own accord.”
“Our view is, an office is not a lease for a white box for 10 years anymore. It needs to provide lifestyle and hospitality,” Grasso said, adding that most of Silverstein's tenants are in the process of figuring out who needs to be in the office and how often they need to be there.
Grasso spoke along with Skanska Executive Vice President for Commercial Development Operations Claire De Briere, JLL Executive Vice President James Malone, Ocean West Capital Partners Director Ryan Tucker, Skidmore, Owings & Merrill Director and Global Interiors Practice Leader Lois Wellwood, and moderator Brian Kang, partner at Greenberg Glusker, at Bisnow’s The Current State and Future of LA Office webinar.
The webinar touched on design changes that architects are exploring to help clients reimagine their existing office space, the shortcomings of working from home from a design and productivity standpoint, and how the coronavirus is changing tenant expectations and perceptions of office space.
De Briere said Skanska is actively involved in a number of certification programs for their properties, including Fitwel and WiredScore. She predicted that, in general, many of the health and wellness building features that were considered a bonus pre-pandemic will become necessities that tenants expect.
“We think [these certifications] show our tenants our commitment to making sure that they have a well-connected, healthy place to work and I think those are the messages that are really critical,” De Briere said.
“Moving forward, I think the expectation of tenants will be that landlords have those things in place … that they are empathetic and a partner to the tenant’s experience as they come back into the building,” said JLL’s Malone, noting that these companies themselves are already considering those things.
“To the extent that you’re an owner or developer and you can work with big enterprise users and small mom-and-pops to make them feel like they matter — I think those landlords are going to win at the end of the day,” Malone said.
Ocean West Capital Partners’ Tucker agreed.
“You’ve got to be proactive in reaching out to tenants right now,” Tucker said.
That way, landlords can find out their tenants’ concerns surrounding returning to the office and get out ahead of those concerns.
On the design side, SOM’s Wellwood said clients she’s encountered are interested in long-term and short-term solutions that could prepare them to weather a similar future situation that could shut down offices. Those include things like making everything in a building touch-free or adding integrated technology that can give tenants quick and accurate information about the number of people in the building or on a certain floor.
“Clients want to know how to keep the workplace relevant,” Wellwood said. “Our conversations with clients are, ‘We don’t think you’re going to give up all your real estate but we need to rethink your real estate, and how you use it, and why.’”