As the world moves to an access economy the office of the future looks similar to a successful hotel brand:
- Customer service driven
- Consistent brand standards
- Available 24/7
- Multi-market
- Transient use
Valuation models must change
Asset values for the office of the future will be unlike they are today. Valuation models must change. No more forward looking rent roll. No more collecting 4 checks per year. Those assets will be worth less.
Value is in flexibility, customer service, brand image and the resulting premiums people are happy to pay for it.
PropCos and commercial landlords must look to the hospitality sector for examples.
Traditionally, the long lease was the answer to retaining customers (tenants). Not anymore. In a flexible space world, a good customer experience is the answer to retaining customers.
PropCos and commercial landlords must look to the hospitality sector for examples.
Like with hotels, asset owners will have a decision to make: partner with a brand or go independent. Partnering with a brand gives asset owners existing systems, guidelines, and tech, as well as sales & marketing support, channel distribution and last but not least, customers.
Customer awareness and trust of branded properties is typically much higher, as a recognised brand means a consistent brand experience.
Being an independent means full control, but starting from scratch.
But how many PropCos and commercial landlords are used to selling space in a transient way? Transient business will require yield management strategies similar to hotels.
So what is the office of the future?
Look at the hospitality sector and see the it staring back at you.
Disclaimer: As the CEO of Bold, a Branded Space-as-a-Service platform thatpartners with PropCos and commercial landlords, I am a bit biased. 🙂