Companies want workers to return to the office amid the ongoing COVID-19 pandemic, but 85% of landlords aren’t sure they have adequate visibility into what investments or features tenants require in order to safely return to work, according to the 2021 VTS Global Office Landlord Report. At the same time, they’re making massive investments in air filtration systems, touchless building entryways and building management systems.
Commissioned from an independent market research firm, the report is based on a global survey of 154 top industry leaders. According to the research, COVID-19 has accelerated the evolution of trends that were already unfolding within the industry, in particular, shifting tenant expectations, increasing technology adoption, a rise in flexible space offerings, and the necessity of digital marketing. The results also make clear that while landlords understand the urgent need to facilitate a safe return to the office for tenants, they lack a clear understanding of the specific building investments or features tenants require, VTS said.
“Our industry is grappling with the biggest recession and public health crisis in recent history, and we don’t expect those challenges to disappear anytime soon. It’s never been more important for industry leaders to share information and best practices for the greater good of the industry,” said Nick Romito, CEO of VTS. “This new research indicates that for the foreseeable future, commercial office landlords will need to proactively manage their business recovery, continue to focus on and even reinvent tenant relationships, and modernize their operations if they are to emerge from COVID-19 in the best position possible. Ultimately, the landlords with the right technology, data and marketing investments will be the ones best positioned to win during the pandemic and beyond.”
The top two business priorities identified by landlords in 2021 are: maintaining tenancy across the portfolio and mitigating the financial impact of COVID-19 due to rent relief, deferrals and defaults. On the positive side, Landlords are increasingly realizing the necessity of technology and data as they manage their businesses and create the best leasing and investment strategies, with 77% percent agreeing that technology is critical for managing their businesses in the wake of COVID-19. Yet only 6% of landlords surveyed completely trust the data sources they use to get market information today. Why? Their No. 1 problem with the market data sources they use today is that they contain lagging indicators.
Landlords recognize that digital marketing has become a necessity to keep the leasing process moving forward and are investing in it, with 73% of landlords agreeing that digital marketing tactics have become necessary to market available space post-COVID-19. Nearly 60% say that tenants expect a virtual space tour before committing to an in-person tour.