A new report by essensys and Verdantix suggests that workers want flexible space — but landlords aren’t meeting their needs.
In fact, only 13% of occupiers believe that commercial real estate landlords are prepared to meet the new needs of their tenants.
However, 67% of landlords recognize that flexible leases can increase revenue.
But it’s not just about flexible leases. Occupiers also want services, amenities, tech-enabled workspaces and a network of locations.
“Landlords need to provide a variety of lease and term options to tenants across their portfolio,” said Jeremy Bernard, CEO North America at essensys. “The reality, particularly in urban core markets, is that vacancy is at historical highs. Landlords are more likely to lease space on flexible terms than in a traditional model. Some rent even on shorter flexible lease terms is better than zero rent on longer lease terms.”
Bernard notes that landlords need to position their portfolio now for the long-term, to continue serving their tenants’ evolving real estate needs.
Landlords are actively trying to incorporate flexible space into their real estate offerings but, according to the survey, not fast enough. “Landlords that adapt quickly to demand drivers for flexible space will come out on top. Those that don’t adapt will have a lot of catching up to do.”