Relationship Status? It’s Complicated. How COVID-19 is Changing the Way Commercial Landlords Interact with their Tenants
As part of British Council for Offices #BCOvoices, our tenant representation expert Dan Bayley shares his view on how COVID-19 is changing the way commercial landlords interact with their tenants.
Ten years ago, the relationship between landlord and tenant was simple. It centered around rent collection day. In today’s world though, this transactional relationship isn’t enough.
Recently, landlords have had to familiarise themselves with the wants and needs of a new, altogether more inquisitive occupier. This occupier demands more than just four walls and big windows. This occupier demands that customer experience be put first and look for workspaces that are as nice to work in as they are to look at.
For the landlord-tenant relationship, this is changing the way the two work together. Landlords are expected to be more open and collaborative in their approach. To keep an occupier happy, and protect the opportunity for long-term security, landlords need to be flexible. This makes the job more challenging. It also makes it a lot more interesting as landlords juggle evolving customer expectations with the realities of what they can control.
The first concern for most occupiers is culture. Whilst seasoned managers may mock the ‘fussy’ millennial worker that expects integrated tech, hot desks and beanbags, the reality is that these softer elements of office design and fit out, when applied correctly, can have a very material impact on a business’ ability to attract and retain the best talent.
This isn’t to say that an office without beanbags and slides won’t attract great talent. The fantastical offices of tech land aren’t appropriate for all sectors and businesses, nor should they be. However, other sectors can and should apply creativity to their office designs. Whether it be a large central socialising area, a selection of breakout areas that offer different work set ups, sound-proof privacy booths or quiet zones – it is important to offer occupants the choice of where they want to work. Different spaces for different moments and different work demands.
At a time when the role of the office is being questioned, this flexibility is more important than ever. The reality of COVID-19 is that the office market is facing greater competition. For the first time, it’s competing with the home and so offering a variety of spaces that can cater to many needs, rather than the single workspace available to most of us at home, is vital.
The second element of office design on most occupiers’ minds today is tech. The everyday worker doesn’t care about how high the ceiling is or who has the flashiest furniture. People want a seamless experience with technology that is intuitive and responds to their changing needs.
Yes, technology is evolving with a never-tiring speed. Sadly, though, that’s no excuse for being left behind. It’s up to landlords to accept this challenge and deliver change that keeps up with the world outside our front doors, or we risk being lost to it. When invested in properly, both financially and through the correct facility management roles, technological solutions can improve the efficiencies we manage as landlords as well as the experience of our occupiers. It can help landlords better measure occupancy levels and air quality that ultimately helps them save on energy, while making the office feel more comfortable for those within it.
Another important aspect is standards such as WELL, Fitwel and Wired and they are becoming increasingly important to both landlords and occupiers. These standards are reassuring for occupiers looking for space as they certifies certain aspects the building sets out to deliver. Equally, it allows landlords to offer a much stronger positioning of the building to future occupiers.
I think the future relationship between occupiers and landlords will be much more collaborative, built on two way communication with the aim to find the best solution for a particular tenant. Being transparent with your occupiers will benefit both parties, allowing them to be honest about their needs and allowing you to be transparent about the challenges so that you’re able to deliver a pragmatic reality that meets the needs of both parties.
As COVID-19 brings new questions to the fore about the role of the office, I would encourage all landlords to lean into the change. By starting an honest conversation about your occupiers’ needs and demonstrating that you can, and you will, continue to learn and adapt, everyone wins. By working together, landlords can deliver better offices, filled with happier and more productive people.
#BCOvoices a new series of blogs by the BCO looking at the impact of COVID-19 on the commercial property industry, along with broader topics.