Guest Post by Peter Shannon, Regional Director of Client Partnerships, Unispace

More and more, we see Corporate Real Estate collaborating with its Procurement Department partners to ensure the best price in sourcing of goods and services. This has gone a long way to advance the sophistication of the industry, but in some cases might miss the mark relative to value creation.

Procurement departments are exceptionally skilled at price negotiation and protecting shareholders’ interests by driving to lowest cost. That notwithstanding, the acquisition, design and management of space is incredibly nuanced.

Commercial real estate should not be solely about the short-term solution, especially in times of dramatic change like today. Tomorrow’s business needs may be wildly different than today’s as market forces shift, innovation timelines condense and the expectations, wants and concerns of employees take center stage. Often – when driven by procurement specialists, rather than strategists – the real estate decisions that are merely handled as transactions can carry a lot of hidden risks.

The supply and demand dynamic has forever changed. Where once it was enough to know headcount growth and its impact on space (FTE projection x Square Foot allocation), real estate departments now have to act as integrators who understand the enterprise business strategy, interpret the demand signal from the business, inform it with the human capital strategy, overlay that with enabling technologies and provide built environments that promote culture, brand and the advance the “human experience.”

By utilizing these perspectives in their workplace acquisitions, employers can reduce risks and move from making a good transaction to making an excellent long-term solution.

Relationships Over Projects

COVID-19 represents an inflection point for employers’ workspace strategies. After figuring out the productivity challenges through technology and remote working in 2020, the focus has shifted to the culture equation in 2021 and beyond. Now is the time to open the strategic real estate process to key internal stakeholders – and external partners.

For example, if a life sciences or lab space needs to expand, the company’s CEO and head of HR might know what kind of real estate portfolio is needed as the operation scales, but to effectively execute on this vision adding value over the long-term requires the industry knowledge of an intimate strategy, design and construction partner. Beyond this, the landscape can vary greatly depending on the sector, so choosing an experienced partner with an end-to-end delivery offering is the best way to cut out inefficiencies, limit risks and put the employer’s culture at the forefront.  

These relationships have shown their mettle over the past tumultuous year as C-Suite and HR decision-makers evolved their focus on the workplace to be a catalyst for co-creation, ideation and culture. With such space considerations in the mix – or driving the real estate process for forward-thinking organizations – strategic partnerships can help clear some of the toughest business hurdles inside and outside the office.

An effective engagement with internal and external real estate partners should tackle the following four arenas:

1) The totality of the business problem that needs to be addressed

2) The human side of that equation and best way to solve it  

3) The workplace need that enhances the human capital in its endeavor

4) The overall portfolio impact – because often a long-term plan cannot be fully supported with a single project

The Workspace Journey

It’s often difficult to see the real opportunity when you’re in the fog of a business cycle, particularly one that’s recently been impacted by a pandemic. When an employer breaks their own tunnel vision and embraces the help of those outside the traditional real estate procurement process, that vision can be seen much more clearly. Personally, I’ve found it remarkable to work with clients who were traditionally more staid and upon seeing the great work-from-home experiment unfold asked themselves: How have we not done this before?

With an economy working from home, it’s become apparent that the model is changing. Many are seeking hybrid solutions where employees come to the office half of the time or only for special team collaborations and client meetings. Some companies may contract real estate footprints by up to 30 percent. It’s a massive cut to be sure but giving more flexibility can mark a paradigm shift for the workforce. Plus, shrinking real estate produces savings that can be reinvested into some really amazing spaces.

It is going to be a battle for talent in the next few years, and the office – particularly how it helps enable this new world – will be the differentiator. The time is now for companies to make this adjustment in their respective workplace journeys. This moment is the catalyst and the wakeup call to change how we do what we can do.

Peter Shannon is the Regional Director of Client Partnerships in the Americas for Unispace.