As the pandemic (hopefully) continues to wind down, the new normal has tenants evolving expectations of their landlords. With the rise in technology and changing needs of the modern workforce, tenants want a landlord that understands how to provide for them. What do they want? To know what you expect from them, when you expect it, and why this is important. Now is the time to integrate upgrades in space and technology. Occupier demand is driving access to total building activation of amenities in either a single building or an entire portfolio. If you’re looking to grow your portfolio or attract better quality clients/tenants then don’t miss out on these landlord tips!
Have a Virtual Tour Available
According to a recent survey by VTS, 83% of tenants surveyed stated they expect to have a virtual tour of the property before seeing it in person. So, including floor plans of the property, measurements on how much square footage there are available, and pictures is not enough. In order to give them the best impression of your property, you need a virtual tour. If you’re not sure how to get started with this, make sure that there is enough light in each room for pictures and videos. You also want to be able to clearly see all corners of the space so include measurements as well. Make it easy on yourself by using these simple tools:
– Google Street View (for exterior shots)
– Walk inside 360° video on YouTube (interior tours) or use VTS’s app called Hubs – which allows users access live interior footage from any location in North America!
Market Your Listing as Flexible
Landlords need to market their space as flexible! As the environment is consistently evolving businesses are too. The landscape is quickly changing and so are the expectations of tenants. Flexibility is attracting tenants more than ever. Even if the furniture is already established in the space, landlords need to market and provide space-planning options to demonstrate how they want to make space meet the tenant’s needs. They also want shorter lease terms with options to expand or reduce their company footprint. Tenants don’t want long-term tenancies anymore. Landlords need to provide a variety of term lengths with options for renewal or termination without penalties on both sides. Property managers and landlords are in the business to make money, which includes leasing out their space when it’s available so they can earn monthly income from that property while still having tenants pay rent year after year. As a bonus, Tenant’s are willing to PAY for flexible terms instead of being locked in a lease (or a deposit) for years with very few smooth mechanisms to make changes to their footprint. Yes, you can get a premium in rent for being more forward thinking!
Technology Speed and Security
Internet speed and security are some major concerns amongst tenants, especially with the common occurrences of data breaches and hacking. These days if a landlord cannot fulfill these requirements, tenants will look elsewhere. Tenants want to be able to rely on their internet and security systems at all times, so it’s important for landlords to provide these services. Larger enterprise businesses like Google or Facebook would never occupy a space without a secure private network or the technology standards to operate and neither will most any other tenants (no matter what their size). Renters and landlords alike want to know that the technology they’re using will not get them hacked or give away confidential information. Leverage solutions like Wired Score to assess your asset’s tech readiness to know how your building stacks up to the growing demands of modern tenancy.
Tenants are always looking for cost-saving tips when leasing, especially when it comes to upfront costs or deposits. Landlords are saving their tenants an enormous amount of capital by leveraging lease security insurance from Otso. This also provides landlords the opportunity to increase the amount of securitization way more what they would typically collect via cash deposits or letters of credit. Otso increases their average landlord customer coverage against defaults by 300%. This is truly a win-win for both tenant and landlord, but most of all this is soon to become the industry standard. Tenants will expect and only lease at properties that offer Otso. Financial flexibility is an amenity, embrace solutions that give you an advantage in attracting, retaining and closing more deals with these tenants.
Older properties (Class B and below) in particular are at risk of technical dilapidation if the don’t make these changes. New investors, not everything is about a fresh sign, paint and a lobby refresh! Think beyond the old ways of solving for the lowest common denominator and ask yourself, what would attract you to this property? It’s a consumer-first mindset…and it’s not the future, it’s the present.
Businesses’ expectations of their commercial real estate landlords are evolving. In the past, they were looking for a property that met all of their needs and is in an ideal location with plenty of parking. The demands of modern tenants embrace a comprehensive experience that delights employees and customers alike with a smooth, healthy and tech-forward experience when interacting with physical real estate. There will always be a need for commercial real estate and lease demand, but solving the puzzle for your assets requires some new and creative thinking by ownership. Listen to your brokerage team and advisors and embrace these trends, your tenants (and your NOI) will thank you for it down the road.