VTS Accelerate 2022: Our Top Takeaways
Commercial real estate tenants, tenant rep brokers, and investors’ expectations have drastically changed over the past two years.
As a result, change was one of the critical themes of VTS Accelerate 2022, the premier conference tailored for today’s senior commercial real estate executives.
Couldn’t make the event in person? Our team of experts put together some top takeaways for you — read on to find out how landlords across asset classes and geographies can gain a competitive edge in a post-pandemic world.
1. Tenants desire positive and frictionless experiences
Office demand was “20% higher in March than February, and was up roughly 8% from a year ago,” according to a VTS report recently cited by CNBC.
This is a promising trend, but how can landlords ensure tenants continue to return and find value in the space they are offering?
“Things need to be frictionless,” said Amy Kotulski, Director, North America Operations, BCG on a panel. “People want to be able to book conference rooms and not wait around for space. We can use tech to take the worry out of coming to work and judging if it’s worth the commute.”
Owners from Starwood Capital, Sage Realty, and Crown Realty agreed the first step is to consolidate existing tech so that tenants can interact with everything your building offers through a single application, whether it's gaining access to the space, or submitting a work order, or booking a room.
Only then you can start analyzing occupancy data to answer questions like:
- How has physical occupancy changed over the last year?
- Which tenants are seeing a higher return to office adoption?
- What property occupancy trends can your teams expect?
- What are portfolio-wide service requests and work order trends and patterns?
- What are some of the top booked amenities across a property, portfolio, or region?
Leveraging tenant relationships isn’t just about maintaining current occupancy. With a more competitive market than ever seen before, tenants can act as advocates for your property, singing the praises of the exceptional experiences you provide. A building that has the amenities tenants want with the technology that enables the frictionless experience they have come to expect is a powerful recruitment tool.
2. Digital marketing and virtual content are a minimum requirement
While COVID-19 accelerated changes in the commercial real estate landscape, the changes may have already been on the horizon. As tenants become more and more digitally native, they have less patience for an offering that won’t meet their level of digital expectations.
In-person touring activity is down, vacancy is up, and for tenant rep brokers with large portfolios, creating custom messages is time-consuming and resource-intensive.
On top of this, leasing decision-makers aren’t just the CEO or COO anymore, they’re often a team including an HR representative. And not everyone can be present for the in-person tour.
“If you don’t have a good digital strategy, potential tenants will throw you out immediately,” said Kerri Thomas, Senior Vice President, Leasing, AREP. “They’re looking for any reason not to tour 20 spaces.”
Especially in the research phase of finding a new building, tenants have little patience in touring multiple properties to find the one that meets their needs. Features that were once a competitive differentiator — microsites, virtual tours, videos of a space — are now table stakes for being in the game.
Today’s leasing decisions are no longer driven by only the CEO or COO, but rather by a roundtable of influencers in the conversation. With busy schedules and multiple prospective offices to see, digital content can be easily referenced by all stakeholders in the consideration stage, increasing the chance that the lease will close.
Solutions that use data to connect the dots between marketing and leasing like VTS Market are becoming increasingly important for teams who want to optimize the whole leasing flow. When insights are derived from marketing and leasing data, tenant expectations can be managed and met at every part of the leasing process.
3. The dawn of a new technology and information era
We kept hearing that both asset managers and investors want more sophisticated data when making decisions. Access to real-time data is one thing, but knowing what information is relevant and how it can be used to influence decisions (and positively impact ROI) is another.
Some stakeholders are also concerned with the cost of data collection. They want to be sure that they are getting access to the right information, when it matters most, and that they are investing in the right tools to get the job done. Data that comes at the right time, and at the right price, is actionable.
“We’re at the dawn of a new technology era in real estate,” said Bill Elder, EVP, Managing Director, New York City Leasing, RXR on a panel. “Information flies around so quickly, but VTS helps rationalize it and make sense of it. The VTS Platform helped us pivot our strategy at a critical time, and also helped legitimize patterns that we were seeing in the market.”
Landlords also focus on other robust solutions, like a CRM tool, to bolster data. Using tenant information to level-up experiences with personalization and behavioral analysis in tandem with VTS creates a comprehensive picture of tenants and their sentiments.
“VTS is now part of my morning routine. I go through my report building by building to know the level of activity so I have a pulse on the health of the market,” said Scott Rechler, Chairman and CEO, RXR.
Businesses are even making structural adjustments to use data more effectively. Merging investment and asset management teams helps to validate what is and isn’t important while creating a closer-knit relationship between data-driven teams to ensure that decision-making is aligned. An effective investment and asset strategy demands integrated data to capture and retain competitive advantage.
A new era of CRE
For tenants, experience is everything. They are no longer considering any property that doesn’t meet their laundry list of in-office needs. For tenant rep brokers, maintaining relationships and open lines of communication is key.
Even if touring and content have evolved into the digital sphere, providing the human element that connects it all is essential to their success. For investors, gone are the days of ‘gut feelings.’ They want access to real-time data that drives decisions they know will achieve impressive results.
Technology can bridge the gap for all CRE stakeholders. Market players are sourcing tools that provide seamless tenant experiences, digital-first marketing, and access to actionable insights for everything, including leasing, market, and tenant data — just some of the priorities for today’s owners and operators.
VTS is laser-focused on providing the industry with a platform of integrated solutions to help fuel decisions around leasing and inform investments to enable top players to stay competitive as the industry continues to shift.
