EQ Office President and CEO Lisa Picard was in the hot seat during her fireside chat with Convene co-founder and CEO Ryan Simonetti during Bisnow’s Midwest Office Development and Leasing Summit at the Loews Chicago Hotel Thursday.
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The Picard-Simonetti chat dovetailed with the news of EQ Office’s rebranding from Equity Office and its plans to partner with flex space operators to make more efficient use of its office footprint, starting with a partnership with Industrious at Los Angeles’ Howard Hughes Center.
Picard said EQ Office is looking to adapt to the times, the rapid changes in technology, its impact on lease terms, the tenant experience and how office owners do business. The status quo is in need of a shakeup, she said.
“Success is a horrible teacher. We have assumptions we use in the industry that no longer serve us. The industry needs to unlearn things,” Picard said.
Picard said business cycles in today’s office real estate environment are so short that they are creating pressures on businesses and leading to shorter lease terms. Most companies don’t know how big they will be in two or three years because of the changes happening technologically with the demands placed on their customers. The size of a company is a direct response to that end user demand — which parts of a company are growing or contracting.
“That makes it really hard for a company to sign a 10-year lease,” Picard said.
The pressures on companies to sustain their growth while adapting to customer demand has created a completely new product type, in flexible office space. As lease terms get shorter, owners need to shift organizationally as the operations of real estate assets become more important as investments.
Taking a cue from Amazon, EQ Office did a thorough review of the tenant experience — “an EKG,” she said — and looked at ways to remove pain points for tenants during the leasing process. EQ Office’s analysis found the tenant experience was at its lowest during construction.
“We’ve been asset- and property-focused because long-term lease commitments forced us to be bondholders. And what do bondholders care about? Their collateral,” Picard said. The main drive for EQ Office moving forward is to be tenant-focused, which will allow the firm to focus on the quality of the asset and leverage technology and training to transform the customer experience, as well as the asset.
Picard said EQ Office will approach tech as a tool supporting its overarching design/build strategy. EQ Office wants to be able to mold tech with its knowledge of what it and tenants want to achieve.
“We like to be the first under the hood to shape how tech will be utilized,” Picard said.
Picard looks to companies like Convene as inspiration for EQ Office moving forward.
“This is the product type the market needs and quite frankly, the market didn’t know it needed it,” Picard said.
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