Op-Ed, Commercial Real Estate, Bay Area
greg fogg
TenantSee Weekly: What Do You See?

When you look at an office building, what do you see?  Maybe you see the architecture.  Maybe it’s the neighborhood, the restaurants, and amenities.  Perhaps, you see the views from within the building.  This is what most people see.  They’re all important.  But it’s what you don’t see that matters most.

TenantSee Weekly: What Do You See?
Op-Ed, Commercial Real Estate, Bay Area
greg fogg
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. 

TenantSee Weekly: Knowing Your When
Op-Ed, Commercial Real Estate, Bay Area
greg fogg
TenantSee Weeky: A Big Decline in Rents, Four ...

Throughout 2020, the prevailing sentiment among investors in the San Francisco office market was one of relative optimism.  After all, despite the fact tenants were prohibited from occupying their buildings, they continued to collect full rent.  The buildings were full, with vacancy hovering around 4%.  Sure, companies weren’t happy about paying for space they couldn’t use, but business was good.  In many cases the tech sector (which makes up most of San Francisco’s office occupancy) was booming due to an even greater reliance on and usage of tech caused by pandemic driven changes in how people were living.  Throughout the course of 2020 there was no reason for San Francisco investors to panic, as few (if any) office occupiers were showing signs of developing long-term hybrid or remote-first strategies.  Most were simply focused on solving for ongoing operations as a temporary reaction to the pandemic.  Yet early indicators did point to a future in which companies would be shedding office space, as some expiring leases were not replaced.  This, coupled with the addition of new supply, caused a big increase in vacancy to nearly 12% by year end.  Despite this large uptick, the brunt of the sluggish demand dynamic was being felt in the sublease markets, where rental economics more accurately reflected the true state of the market.  Despite a total closing of the office market in 2020, average asking rents ended the year off just 6% from the pre-pandemic high.

TenantSee Weeky: A Big Decline in Rents, Four Years in the Making
Bay Area, Commercial Real Estate, Op-Ed
greg fogg
TenantSee Weekly: Modern Workplace Planning: ...

In the years leading up to the pandemic, most medium and small companies defined their office space need based on headcount (current and projected), space programming, and industry/sector norms.  The exercise was mostly formulaic.  The primary differences in the offices of a small, regional law firm compared to those of an AM Law 100 firm would be scale, the cost of finishes, and the quality of the building and views.  It was planning for the same outcome, just at different levels on the cost spectrum.  Companies having a larger portfolio of offices would typically create a “workplace strategy” that included guidelines around programming (e.g., space layout, office size, critical adjacencies, growth factor, finishes, FF&E, etc.).  These guidelines could then be used to inform the real estate process across geography.

TenantSee Weekly: Modern Workplace Planning: Solving for Experience Part I: The Purpose
Bay Area, Commercial Real Estate, Op-Ed
greg fogg
TenantSee Weekly: This, or That?

Negotiations are always about (or should always be about) this or that.  There’s always something else, maybe that something else is nothing (as in sometimes the best thing to do is nothing at all).  Decisions made without proper consideration of all relevant alternative scenarios are decisions made poorly.  As important, in the context of office lease negotiations, the best negotiated outcomes are directly correlated to the extent to which we understand the alternatives of the landlord counterparty.  This is a bit counter intuitive, allow us to explain. 

TenantSee Weekly: This, or That?

TenantSee Weekly: Maybe It's Time

TenantSee Weekly: Maybe It's Time

There’s always been a large gap between what companies need from an office and what the market offers. Over the past decade, as the coworking market rapidly evolved, landlords were forced to rethink customer experience, resulting in an “amenity war” that has made many office buildings more valuable and attractive to occupiers. But despite new lounge spaces, high quality exercise facilities and other project-based amenities, the nature of the office lease commitment in major US metros has remained unchanged. The product is still designed to lock in tenants for the longest possible term at the highest possible price, while minimizing the amount of capital the landlord must spend to win the tenant. Addressing the gap between occupier and landlord objectives may be what’s next in the evolution of the office.

TenantSee Weekly: Not 2001

TenantSee Weekly: Not 2001

The last time San Francisco office vacancy hit 20% was 2001. Asking rents dropped by more than 60% in the early 2000s. As of 2Q 2001, overall vacancy is 20.1%. This is up from about 4% in 1Q of 2020. Yet asking rents for direct space are down only ~10% from their pre-pandemic high. Why?

TenantSee Weekly: Where Do I Sit?

TenantSee Weekly: Where Do I Sit?

Coworking, hoteling, benching, cubicles, private offices, phone booths, all-hands and collaboration space, game rooms, food service, sit/stand desks, hybrid, remote, exercise facilities, outdoor space, technology…the way we work has been rapidly changing for the past decade. The pandemic merely accelerated these changes.

TenantSee Weekly: High Vacancy, Limited Options

TenantSee Weekly: High Vacancy, Limited Options

Wit all the news about the high vacancy rate and ongoing uncertainty around return to office, companies beginning to explore the San Francisco office market expect to select from a wide range of site options and to realize substantial savings over their pre-pandemic lease costs. yet for tenants seeking certain types of space, the market experience is decidedly different, characterized by limited options and relatively modest levels of landlord concessions. Why?

TenantSee Weekly: Creatures of Habit

TenantSee Weekly: Creatures of Habit

Habits dictate so much of our behavior. This past week I’ve been returning to my office. Cushman & Wakefield has a beautiful office on the 23rd floor of a downtown high-rise. My personal space there affords me a view of the San Francisco bay. I have every reason to rush back to the office - not the least of which is that helping companies lease office space is my business.

TenantSee Weekly: How to Plan a Hybrid Workplace

TenantSee Weekly: How to Plan a Hybrid Workplace

For over a year, most companies have survived with limited or no use of their office space. Now that the pandemic is beginning to subside in the US, office occupiers are planning a return to office. Many are planning to modify elements of their space usage to meet the changing demands of their employees. The most common approach is the hybrid office wherein employees have the flexibility to use the office on a periodic basis to fulfill specific work-related needs. In the hybrid office, employees can choose to gather for team collaboration, for culture building or client facing events/meetings and to secure quiet “head down” space for work they may not be able to accomplish at home. On the other hand, employees have the flexibility to choose to work from home or remotely at least some of the time.

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TenantSee Weekly: How Time Affects Negotiating Strategy

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TenantSee Weekly: How Time Affects Negotiating Strategy

San Francisco Bay Area office occupiers are entering one of the best negotiating environments since the dotcom crash of 2001. Yet benefiting from this market is less straight forward than in past downturns because of uncertainties around how to plan post-COVID occupancy. Getting your real estate “right” requires a level of pre-planning not typically associated with the acquisition of office space. The first question you should ask is not where but why. As in, why have an office?

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Market Outlook Q1 2021- Tenant Perspective

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Market Outlook Q1 2021- Tenant Perspective

This San Francisco office market report is provided compliments of Samantha S. Low and Greg Fogg, Co-Founders of TenantSee. TenantSee is a tenant real estate product combining a team of subject-matter experts with powerful technology to make tenant real estate smarter, faster, and better. Our report is intended to provide you the tenant, with meaningful insights, not raw data.

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Market Outlook Q4 2020 - Tenant Perspective

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Market Outlook Q4 2020 - Tenant Perspective

To our clients and loyal followers…In a departure from our normal practice, we’ve chosen to write a letter to close out what has been a most unusual year. With respect to office space, it’s no stretch to describe 2020 as the most impactful year of the past century. What changed? In a word: everything.

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Market Outlook Q3 2020 - Tenant Perspective

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Market Outlook Q3 2020 - Tenant Perspective

This San Francisco office market report is providedcompliments of TenantSee. TenantSee is a tenant realestate product combining a team of subject-matterexperts with powerful technology to make tenantreal estate smarter, faster and better. Our report isintended to provide you, the tenant, with meaningfulinsights, not raw data.~

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Maximizing Employee Engagement Through Total Workplace Ecosystems

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Maximizing Employee Engagement Through Total Workplace Ecosystems

The Covid-19 pandemic is not only the most significant public health challenge of our time, it is also massively disrupting the way we live, socialize and work. While corporations navigate a rapidly changing business landscape, they’re also forced to solve for new operational challenges they’ve never seen before. This is a highly complex time. Among the most significant challenges is that of creating optimal workplace solutions that foster employee health and wellness, are sensitive to the differentiated employee needs and maximize employee engagement/productivity.

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Market Outlook Q2 2020 - Tenant Perspective

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Market Outlook Q2 2020 - Tenant Perspective

This San Francisco office market report is providedcompliments of TenantSee. TenantSee is a tenant realestate product combining a team of subject-matterexperts with powerful technology to make tenantreal estate smarter, faster and better. Our report isintended to provide you, the tenant, with meaningfulinsights, not raw data.~

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TenantSee: Modern Solutions

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TenantSee: Modern Solutions

Office space is a physical environment in which employees gather to fulfill the goals of the corporation, the most obvious being profit. The way employers use office space has continuously evolved over the years most notably as new technologies emerge. Over the past 2 decades many technologies have been developed that would otherwise enable a significant shift in the way we work, especially in terms of where we work. However, notwithstanding the presence of these technologies, employers have mostly been reluctant to fully embrace their use due to uncertainty around how such changes would affect productivity and culture. The covid-19 pandemic forced everyone to embrace tech, shifting most workers from offices to working from home. Employers have been surprised to find their worst fears unfounded. 

Armed with the knowledge the enterprise can survive, occupiers find themselves having a new conversation about workplace solutions. This is among the more valuable corporate undertakings of the past century. Why? Because office space is not really about buildings, location or even cost…it’s about supporting and promoting employee engagement. Engagement can be defined in a variety of ways but the simplest way to think about it is in terms of how well the employee is thriving.  A thriving employee understands, is connected to and contributes to the corporate culture. She is healthy and happy. She is loyal and disinclined to seek other opportunities. She is productive. There are many drivers that contribute to employee engagement but the workplace is among the most impactful.

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Why Office Rents Fall Unevenly

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Why Office Rents Fall Unevenly

Over the past decade as demand surged and supply became increasingly limited, office rents rose uniformly across the bay area. But now that demand is waning and supply rising, don’t expect landlords to make downward price adjustments in unison. Landlord behavior varies by type of landlord (private capital, REIT, institutional fund), debt and equity, stability of tenancy and cost basis. While product type may be comparable (e.g., class A office buildings in the San Francisco financial district), individual owner motivations reflect the highly differentiated interplay of these variables.~

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How To Sublease with Success: The TenantSee Approach

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How To Sublease with Success: The TenantSee Approach

Recessionary pressures often result in reduced hiring and/or lay offs, leading to excess office space. The COVID - 19 Pandemic has forced many San Francisco tenants to look to the sublease market to mitigate the expense of excess office space. Over the past decade it has been relatively easy for occupiers to secure subtenants, often at a profit. Yet in times of macro-economic uncertainty, many tenants are surprised to learn their space is worth less (sometimes considerably less) than their cost basis. This is one of those times.

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PROCEEDING CAUTIOUSLY IN UNCERTAIN TIMES - TENANTSEE SERVICE DIRECTORY

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PROCEEDING CAUTIOUSLY IN UNCERTAIN TIMES - TENANTSEE SERVICE DIRECTORY

Among the many reasons we created TenantSee is our belief that tenant real estate services should be full-scope, easy for occupiers to access and delivered with total transparency.  Most real estate service providers simply don’t have the scale to address the entire spectrum of occupier need.  The handful that have such scale require tenant clients to navigate a maze of siloed service lines that are poorly integrated with conflicting agendas.  TenantSee, powered by Cushman & Wakefield, offers occupiers industry-leading resources accessible through an award-winning technology platform from which services and outcomes are delivered and measured with transparency.  ~

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Market Outlook Q1 2020 - Tenant Perspective

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Market Outlook Q1 2020 - Tenant Perspective

This San Francisco office market report is providedcompliments of TenantSee. TenantSee is a tenant realestate product combining a team of subject-matterexperts with powerful technology to make tenantreal estate smarter, faster and better. Our report isintended to provide you, the tenant, with meaningfulinsights, not raw data.~

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Start at Why

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Start at Why

Technology has had a growing impact on how corporations think about labor, facilities and cost.  In particular, companies have found that they don’t always need to have a physical presence to be present.  And where they are physically present, they seek deeper understanding of how to design their facility to maximize employee engagement.  In short, the scale and design of the modern workplace is rapidly changing in response to technology.

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Five Critical Advisor Ingredients For Office leasing Success

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Five Critical Advisor Ingredients For Office leasing Success

In my 30-year career in commercial real estate, I’ve seen all kinds of marketing strategies. In my experience, tenants are often unaware of the key qualities in an advisor that reliably predict success, making them susceptible to selecting the wrong advisor. To achieve optimal office leasing outcomes, occupiers need to engage a service provider who possesses the following critical ingredients:

1. Market intelligence.

2. Planning.

3. A full-scope team.

4. Thought leadership/strategy.

5. Experience.