Here's How to Decide What's Next For Your Physical Workplace
Video: Real Estate Options in a Time of Uncertainty
Since the onset of the pandemic, it feels as if there’s an article every week that either forecasts the death of office space, or defends the need for a physical workspace. More than ever, real estate is on the top of every decision maker’s mind. With a lack of clarity in the near future regarding our return to the office, indecision is extremely common.
In Boston, we’ve learned firsthand that there is no one-size-fits-all solution for your real estate strategy amid a pandemic. On one side of the coin, real estate is directly tied into the life science and industrial boom we are currently experiencing. On the other, TAMI tenants are currently saturating the downtown market with sublease space. That said, there’s a chance your company has an upcoming critical lease date to consider. Whether it’s an expiration, renewal or otherwise, your organization will soon face an important business decision that will need to be made in what feels like a vacuum.
With major biotech firms on the brink of a potential vaccine, and cases rising to record-setting levels, there’s still a significant amount of insecurity when it comes to a realistic timeline for a return to the office. Simply put, there is no precedent for this new relationship occupiers have with their spaces, and as a result, their lease agreements. Therefore, in a time when uncertainty permeates our every decision, your organization must find the right strategy to address your office space.
Weigh Your Options
One of the most important concepts to remind yourself is that you have options available. Keeping this in the forefront of your mind is an important tool as you navigate a challenging period.
For example, you could embrace a renewal bandaid, and kick out the lease an additional 12 to 18 months. This will create minimal exposure to change, but won’t create enough leverage for a significant savings or a downsize in footprint. It’s more of an early intervention, providing you some extra time to consider your options and pick one that meets your needs.
There’s also the option to downsize, and extend your lease for a typical lease term. Since landlords view lease terms right now as significant security, they will be much more willing to provide concessions like free rent, additional tenant allowance or flexibility options like downsizing initially.
The option to not renew your lease and instead explore other flexible workplace options is also a possibility. While it’s most likely your best bet financially, there are some important qualitative aspects that need to be weighed in your decision, ranging from having your own space and branding to company culture and control of space.
One Size Does Not Fit All
When it comes to your office strategy, a one-size-fits-all attitude doesn’t apply. The idea that all companies must choose the same solution could not be more inaccurate. Every company is not Twitter, functioning remotely as they please. And similarly, not every company needs to have all their employees return to the office as soon as possible. The options we’ve previously mentioned are just a few of the many choices you can make for your organization.
Recently, I was told “it’s all about what the decision makers are doing to think through people, culture and communication.” There are so many qualitative factors to consider, ranging from workplace demographics and location to technology support. In other words, your business drives your real estate strategy, not the other way around. Let’s work together to figure out what real estate strategy will be best for your business for both the long and short term.