Lisa Picard, President and CEO of EQ Office (manager of Blackstone’s US office real estate portfolio) makes a point of declaring herself an “Accidental CEO.” Her candor, sharp wit, and vision for the future of office owners suggest the opposite. At Catalyst 2019, Picard spoke candidly about what often goes unspoken within commercial real estate office market. Her presentation entitled “Making Work Better Than Home” embraces multiple observations.
I have a tendency to just say sh*t; but people in our industry find it refreshing because there are a number of things going on that we don’t talk about.
Here are some of our favorite key takeaways, expanding the ways to consider office space in the face of growing change within and around the commercial real estate industry.
New Expectation Place a Premium on Culture
If Uber says that you have to wait for a driver for five minutes, do you cancel? I’m one of those.
Fundamentally, the way that people work has changed. Elevated expectations in our lives translate into new demands at work and have created an atmosphere that Picard observes as “untethered as the new normal.” Motivations for joining an organization are moving beyond the paycheck, forcing business models to rapidly and continually evolve.
According to Picard,
With the expectations of having everything everywhere all of the time, every business is under a new stress.
Demands on leasing terms are shrinking, desire for community in the workplace is rising, and companies are beginning to chase talent into new markets. This places an increased premium on culture in the work setting. As a result, companies are changing the way in which they obtain office space. If culture is the new capital, then the relationship between offices and their impact on their occupants must continue to evolve.
Office is Now, More Than Ever, A Two-Sided Market
I know from my time in hospitality that when you have a vacancy every night, your service game has to be up bigtime!
While a great deal of focus has justifiably been placed on capital markets, there is an equal and growing need to focus on customers. As lease terms shorten, the need for enhanced customer service is crucial.
In moving from a B2B to a B2C marketplace, customer channels are widening. We’re seeing flex operators acting as brokers bring clients to the marketplace like never before. How is this all happening? Picard points directly to clients’ increasing needs.
Customers are seeking different products. We only sold one product before. Now, to be a successful office owner, you have to productize the real estate.
Like so many industries facing disruption, success lies in a dedicated and agile relationship with your customer.
Driving Humanity into the Workplace
The ultimate goal is to create space for culture to thrive, and for people to be inspired.
What are the best ways for organizations to attract, retain and inspire the workforce today? Picard breaks down the benchmarks towards a productive office environment as the four C’s:
- Concentration: “A place to assimilate ideas where you can concentrate and focus.”
- Collaboration: “Spaces to work in small groups as well as sit down and share ideas.”
- Convenience: “If you’ve got a ‘busy life’ you like things handy and nearby.”
- Community: “Places to see and be seen. Where you start to assimilate ideas; where you start to enrich experiences.”
These four elements combine into what Picard considers “spacial alchemy.” In order to attract and retain talent in today’s evolving economy, inspiration begins with a vision and ends with the execution of a top-to-bottom workplace of flexibility, productivity, and inspiration.