How commercial real estate brokers and office users will adapt to the new future
Here in Ontario, we recently learned that physical distancing protocols could be extended for an additional three months or more. Even then, people may want to keep their distance until it’s proven that the coronavirus threat has subsided for good. This paves the way for a new reality where more employees are working from home than ever before.
“The Government of Ontario has declared real estate an essential service to enable transactions to occur,” OREA President Sean Morrison said in a press release, adding, “I would like to Please note that this does not mean that business is business as usual for Ontario real estate agents. .” This means that we will have to adopt new ways of managing our brokerages.
That’s why, as a commercial real estate broker, it’s become increasingly important to continue to innovate and embed this mindset in your business, cultivating new ways to make the agency work with your team. . Right now, the real estate industry is venturing into uncharted territory, hastily trying to keep pace in an ever-changing environment. The call for change and adaptation has never been more critical to thriving. I predict that the new real estate infrastructure will unfold in the following way.
A change away from square footage
There will be a noticeable shift in tenants pushing to reduce their exposure by reducing their retail square footage. Tenants with teams larger than 10 people will vacate shared spaces, if they have not already done so, until it is safe to gather in groups again.
This is a fact that real estate brokers are already beginning to see. The Toronto real estate market is reported to have fallen 37% compared to the same period last year as of March 14, 2020.
Larger space users will seek to integrate this newly created home-working infrastructure and reduce their dependence on office space, which has become very expensive in the city centre. There will be a shift to smaller spaces in both of these groups, so expect to see a tightening in the 1,500 to 8,000 square foot space range as things begin to stabilize.
Business brokers should continue to follow your clients and let them know that there are now tech-ready spaces that may not have worked for them before. Downsizing can save your client some much-needed cash, and they’ll be grateful for your help.
Revisit spaces that may not have worked before and really dive into what your client is looking for. Suggest your client take advantage of opportunities where they can rent cheaply and reconfigure the space with a landlord-tenant allowance or even finance furniture packages over a one-year term, rather than paying upfront.
New addiction to digital tools
In order for potential new tenants to make quick decisions, they will need verified information and access to units – although they may not want or be able to visit them in person until the pandemic threat subsides. has not passed. Landlords and real estate brokers will need to provide potential future tenants with quick and detailed information in order to successfully rent their properties using digital tools such as:
• Virtual tours.
• 3D floor plans.
• Customizable space plans according to tenants’ needs (and quickly).
• Built-in furniture plans and pricing.
• Realistic renderings of what the finished space might look like, if it’s not already move-in ready.
• Easy access to a lawyer and a notary if a transaction must be concluded.
Brokers, with the help of landlords, should be able to show rental spaces in a virtual modality and consider allowing tenants to condition their offers on a final viewing of the space. And it seems natural that we are going in this direction. With most real estate consumers locating, researching and communicating digitally today, the smart move would be to move more of our industry online.
For commercial real estate brokers, this is a call to think ahead. The actions we, as an industry, take now in the midst of a crisis will only add to a more robust real estate landscape in the future – one that transcends the physical world. Until now, real estate has been sorely lacking in technology, failing to take advantage of tools once considered useless or overrated. However, tools like augmented reality, 3D walkthroughs, and digitized floor plans will begin to see widespread use. In the end, I predict that the real estate sector will emerge from this confinement with innovation, more refined and in tune with our consumers than ever.