TenantSee Weekly: What Comes Next For Office
We’ve noticed an interesting shift in how companies are thinking about their offices. For some time now, many companies have resolved to employ a hybrid approach to workplace, having employees work in office for a designated number of days each week. In many cases, this solution was chosen more for how it seemingly struck a compromise between employers who wanted employees in the office and employees who sought freedom to choose. To date, companies have been relatively lax in enforcing their workplace plan. What’s changed? Leadership is now becoming increasingly frustrated at spending on underutilized real estate. Companies track space usage, and they don’t like what they’re seeing. The occupancy reality is often way below what it would otherwise be if employees were following the hybrid work policy. The company leasing 10,000 sf to accommodate an average of 10 workers each day is (painfully) aware of the wasted spend.
TenantSee Weekly: Knowing Your When
We see a lot of confusion in the market around when to begin negotiations. It’s not an insignificant consideration. In fact, when you begin can make a huge difference in the outcome. It’s understandable that tenants would not know when to start. Brokers are not always keen to start at the right time, since compensation is derived by transacting and the closer the tenant is to lease expiration, the faster it will need to transact (and the fewer options it will have). Good for the broker, bad for the tenant. This creates a misalignment of interests that discourages thoughtful consultation on the front end – the more time a broker spends on a project, the lower the compensation.
