Changing landscapes have spurred the need for agile real estate strategies. This is creating real implications for workplaces, assets and overall portfolios. For all stakeholders, infusing agility into their real estate will help them embrace change, allowing for a certain level of uncertainty while supporting the evolving needs of organizations and the employees they serve.
AGILE REAL ESTATE: THE WHAT, HOW AND WHY
WHAT IS AGILE REAL ESTATE?
Workplace environments and space agreement structures, that are dynamic and nimble in supporting organizational objectives and employee needs-today and tomorrow.
HOW DO YOU ACHIEVE AGILITY?
Create a unique and implementable strategy that increases productivity, drives efficiency, creates appropriate flexibility and delivers rich experiences to employees and tenants.
WHY DOES AGILITY MATTER?
Agility delivers more effective workplaces and assets, and streamlined portfolios, that help drive better business performance, helps attract and retain talent and tenants, and increase asset value.
For occupiers, an agile real estate strategy delivers high-performing workplaces and portfolios that can quickly adapt to meet the changing needs of individuals and the organization. However, this does not signal the death of long-term leases and ownership. Rather, the way the core offices are designed and allocated, and the amount of space dedicated to them, is likely to be reimagined.
For occupiers, agile real estate strategies incorporate:
FLEXIBLE SPACE SOLUTIONS
Lease flexibility is a concept closely connected to agile real estate. While serviced offices have historically offered flexible leasing solutions, the pace of change impacting workforce dynamics has created additional requirements. Today, a proliferation of flexible space solutions exists, with coworking being the most well-known. Introduced in 2005, coworking has experienced exponential growth in the past decade. The appeal of the coworking model lies in the opportunity for lease-term flexibility coupled with highly appealing workplace environments. Originally intended for individuals and small startups, broader organization interest has driven the emergence of "enterprise solutions" within coworking to deliver flexibility, aesthetic value and speed to market, but without the element of communal space that enterprise organizations typically do not want. With these new models, savvy occupiers are leveraging agile strategies that integrate flexible, short-term and long-term lease structures to most effectively anticipate and solve for talent and organizational needs.
Initial Considerations for Occupiers:
For owners and investors, agile real estate strategies incorporate long-term leases with a mix of other solutions to create long-term value and near-term stickiness for their assets. The most savvy are taking a more active role in finding and executing solutions that increase asset utilization and deliver dynamic experiences to attract the most demanding and desirable tenants.
Agile assets incorporate:
EXPERIENCE-LED AMENITIES, SERVICES AND PROGRAMMING
The power of place to draw employees is a key attribute that tenants factor into their building-selection decisions. Today, real estate owners and investors are providing tenants with high-value, high-efficiency amenities, including meeting spaces, fitness facilities, catering and concierge services, to attract them to their assets. The owner and investor value proposition has become greatly enhanced and serves as a critical differentiator.
Landlords are delivering these offerings directly or through third-party operators. These operators, along with a constant wave of emerging technologies, are driving this experience-led, on-demand, new reality for real estate. And many landlords believe these new offerings are contributing to significantly faster leasing velocity within their buildings.
DIVERSE LEASE MODELS
Landlords play an integral role in enabling environments where larger organizations can achieve the right balance of leasing models. In conjunction with traditional leases, flexible-space solutions can help organizations looking for speed to market, simplicity of transaction and ability to scale in response to market demand. Today, most see the locational suitability and impact for flexible-office provision being greatest in global gateway cities, with far lower assessment for fringe locations and smaller cities.
Initial Considerations for Owners and Investors:
Agile real estate is not a fad. For organizations and real estate investors and owners, it will become an increasingly important way for them to drive and maintain competitive advantage. But how an agile solution is brought to life, and the value it can deliver, will be unique for each individual and organization it serves.
SO HOW DO YOU BUILD AND EXECUTE THE RIGHT AGILE REAL ESTATE STRATEGY?
In today's fast-moving, rapidly evolving, hyper-personalized world of work, there is no one-size-fits-all solution. For the occupier, you have to start with your overall objectives. For the investor and owner, the opportunity lies in understanding what will best position assets with current and prospective tenants. Either way, embracing an agile approach to real estate that couples traditional real estate models with emerging real estate approaches is critical to developing nimble strategies that effectively serve business objectives, while remaining flexible to meet future needs.
Having a partner to help navigate this changing and often complex landscape is key. At CBRE, our expertise, experience and industry-leading platform enable us to bring together the right people and solutions for creating and implementing agile real estate strategies to better serve business objectives and the bottom line.
The demands on real estate are evolving rapidly. Workplaces, assets and portfolio strategies must evolve too. The future of work is truly agile. Building competitive advantage begins with agility at the heart of your real estate strategy.