Consulting Services Can Aid in Scenario Planning

With Chase Bourdelaise

The economic disruption caused by COVID-19 will require many companies to revise their short- and long-term business plans, which is likely to impact current and future space needs. For some occupiers, market trends could lead to a temporary or permanent expansion; for others, a reduction or consolidation of space may be warranted.

To inform these important decisions, Transwestern Consulting Services provides clients valuable insight to help align workplaces with organization strategy. Managing Director Chase Bourdelaise shares some examples.

TW: What challenges are commercial real estate tenants facing?

Chase: In many industries, business has slowed considerably, and in some it has ground to a halt. In the coming months, tenants will be faced with difficult decisions concerning their operating space but should take full advantage of optionality negotiated into lease agreements. The biggest unknown is the amount of time it will take to get “back to normal.” That makes space decisions very difficult, as real estate is one of a business’s highest costs and is not something that can be ramped up and down rapidly.

TW: In cases like this, where it’s impossible to predict where we’ll be in six months – or even six weeks – what services can your team offer to help tenants frame potential scenarios and solutions?

Chase: Workforce and people analytics are more important than ever. This includes understanding employee commute patterns, lines of communication, and both typical and newfound forms of workplace engagement. The current environment has prompted proactive analysis of employee badge data and utilization of conference rooms, as well as wellness initiatives within the workplace.

For organizations that have found remote work to be more manageable than expected, we are seeing interest in unassigned seating arrangements that could provide more flexibility and potentially better hygiene in the office going forward. Our team is helping clients explore these scenarios to better understand the impact modifications will have on space, density and workstyle.

That said, while considering future scenarios is a proactive measure in a time of crisis, we believe it is still too early to make decisions that completely embrace remote work or change the workplace layout. We are operating under unique restrictions, not normal business conditions. Our team’s preferred approach is to analyze a specific environment prior to COVID-19, study how work changes when we exit this crisis, and then compare needs and new preferences that inform future space decisions.

TW: In a situation like the one we are facing, what elements of portfolio management are most critical?

Chase: A unique challenge that many companies are facing is one of bandwidth, in the employee sense. For the most part, productively has decreased while demand to manage real estate obligations and corporate finances has increased. A common component of portfolio management is smoothing out lease expiration dates so that every obligation does not require attention all at once – giving each space commitment the strategic attention it deserves. Today, however, conversations with landlords are happening portfolio-wide and all at once. Companies also realize they are facing limited windows of time before employee and client relationships are negatively impacted, or even severed. Suddenly, companies are juggling enormous spikes in the management of important projects and optimizing where they can.

The most valuable takeaway for our clients has been the importance of a robust, shared system for tracking lease information, transaction status, internal and external conversations/notes, and key contacts. Moving away from managing portfolio data in Excel and toward a process that syncs with lease administration, visualization and reporting tools is critical to efficient management and identifying opportunities to optimize.

TW: If one of my clients is looking for support, what is the best way to get started?

Chase: I’d be happy to talk through your client’s situation and consider ways Transwestern can add value now and in the future.