Charlie Morris, Head of Flexible Office Solutions, Avison Young
The CRE sector is still in the early stages of a transformational period led by digitization, technology advances, globalization, and an increasingly mobile workforce.The flexible office industry has emerged as a disruptor to the CRE sectorand has had a significant role in raising the expectations of corporate occupiers. These new consumer expectations have brought tenant engagement, hospitality, ‘amenitization’, and digital leasing strategies to the forefront of the office sector.
At the end of last year, one of the most commonlyknown names in the coworking operator space, WeWork, admitted that it was, in fact, a real estate company, not the technology company that had engendered VC interest.Still, there is little denial that its utilization of technology and innovative service offering paved the wayfor flexible office to even exist.
The COVID-19 pandemicthat has emerged as a global health crisis in the first quarter of 2020 has forced many organizations around the globe to go outside of their comfort zones and engage in a work from home strategy to support social distancing measures recommended by local and national health organizations and governments. Without adequate technologic advancements, productivity, communication,and collaboration would be almost impossible in this period.
My strong suspicion is that nearly all innovations and data are not used as tools of competition by their holders. Policy, past practice, and politics keep them protected
When we see the other side of the current challenges, we anticipate a significant increase in employees and employers who realize that a remote working environment can be productive. A new wave of employees demanding flexibility could lead toa significant shift in corporate occupier’s portfolio management strategies.
Traditional CRE industry professionals have already begun to acknowledge and appreciate the appeal of flexible office to the enterprise occupier community. In the past few years alone, we have seen a dramatic shift toward the delivery of hospitality experience along with a new level of amenities in the office sector. To attract people to a particular location, place making and amenitization will perhaps be as critical to attracting people to a physical office as the physical location itself.
The flexible office landscape has brought elements of various PropTech sectors into workspaces –Smart Building Technology, Tenant Experience Platforms, Asset/Portfolio Management tools, property marketplaces, Architectureand Design, and Construction management products can either support or have evolved their offerings based upon the disruption of the flexible office economy. The legacy service companies within thesector will continue to play a role, but those that embrace and fully leverage the power of data, analytics, and automation will be the ones who thrive in the decades to come.
The rise of flexible office has initiated the adoption of a Core + Flex portfolio management strategy for both the enterprise occupier and institutional owner. To achieve these new standards, each of these parties has demonstrated a willingness to further engage with PropTech offerings to support their real estate strategy.
To embrace the disruptive state of the industry, most global brokerage companies are delivering a product-focused model, which is being built or via acquisition ofPropTech companies. A productoffering is largely driven by a desire to maintain control or as a self-preservation measure, buthaving an in-house offering canlead tounnecessary conflict or bias when advising clients on engaging in innovative solutions.
In many ways, flexibility applies to more than just space. It also applies to thinking. In building the Flexible Office Solutions team for Avison Young, we’ve have committed to a service-driven model allowing us to maintain a fiduciary role with our client and providing the ability to remain agnostic to a specific product or solution to satisfy our client’s needs. In doing so, we can recommend market-leading solutions that combine flexible offerings with necessary innovation and technology solutions to support clients’ unique Core + Flex portfolio and/or asset management strategies.
Nimbleness is key. The number of combinations available to meet strategy and portfolio needs in this space is endless and will continue to be driven by existing, emerging, and as-yet-unknown technology and innovations
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