“For years we all laughed at them”: office brokers warm to virtual tours

David Goldstein, Nicole LaRusso and David Falk on bespoke development and how demand for space could evolve

TRD NATIONAL /
May.May 19, 2020 04:30 PM

Smaller buildings could be the next big idea for office developers.

“I think you’ll see development; it might be more bespoke in nature,” said Savills’ David Goldstein, in a TRD Talks
panel Monday on the future of the office market. “Occupiers will come back – in a different form, granted, maybe not as massive as they were in the prior cycle, or as dense of course. But I think you’re going to see some bold candidates emerge.”

Goldstein, a vice chairman at Savills, was joined by CBRE research director Nicole LaRusso and Newmark Knight Frank tri-state president David Falk for the panel, moderated by TRD managing web editor James Kleimann. The discussion focused on what the office market could look like in the wake of a pandemic that has seen great chunks of the office-going population working from home and many companies indicating their office needs might dramatically shrink.

(Related: Office landlords: Don’t eat before watching this)

Smaller buildings of up to 400,000 feet, Goldstein said, could see more interest from tenants, who may also now place more emphasis on amenities like private entrances.

LaRusso said there’s no appetite to kick off new projects at the moment, though it’s likely to return.

“I don’t know if anyone’s running to finance it right this second,” she said. She noted that office markets in China that shut down due to the coronavirus didn’t experience a dramatic drop-off in pricing, which she said is a good indicator for New York’s eventual bounceback.

As for what that return to normal will look like: Falk said new lease deals will drop off until tenants get a better understanding of their long-term space needs.

“We’re going to see a lot of short-term kick-the-can renewals just to live for another day,” he said.

Accurately pricing space and valuing office buildings will also become challenging in a post-Covid environment, the brokers acknowledged, and LaRusso said it was clear operating costs would go up as landlords take more measures to keep their buildings sanitary.

The brokers discussed their reluctant embrace of what used to be seen as unthinkable: virtual tours

“For years I think we all laughed at them,” said Falk, who said virtual tours are now helping tenants narrow down their picks to a handful of potential sites.

“There’s no substitute at the end of the day for walking the site,” Goldstein added. “But I think this technology can get you 80-plus percent of the way there.”

Write to Rich Bockmann at [email protected] or 908-415-5229


Related Articles

arrow_forward_ios
What will proptech look like in 2019 and beyond?

What will proptech look like in 2019 and beyond?

What will proptech look like in 2019 and beyond?
The Observation Deck at Hudson Yards (Credit: Adam Pogoff)

Views from 1,100 feet: A tour of Related’s “the edge,” the tallest outdoor observation deck in the Western Hemisphere

Views from 1,100 feet: A tour of Related’s “the edge,” the tallest outdoor observation deck in the Western Hemisphere
Council member Eric Ulrich and City Council member Keith Powers

Council members talk broker fee caps and real estate donations

Council members talk broker fee caps and real estate donations
Quarantine Cribs

TRD Quarantine Cribs: Take a tour of Cathy Franklin’s whiskey distillery & home

TRD Quarantine Cribs: Take a tour of Cathy Franklin’s whiskey distillery & home
Clockwise from top left: Barbara Askins of 125th Street BID, Dan Biederman of 34th Street Partnership and Jessica Lappin of Alliance for Downtown New York

Business leaders see trouble as homeless flock to Manhattan hotels

Business leaders see trouble as homeless flock to Manhattan hotels
Coffee Talk with John Catsimatidis

Catsimatidis: NYPD should have sent rioters to Rikers

Catsimatidis: NYPD should have sent rioters to Rikers
Barika Williams of Association of Neighborhood and Housing Development and Adam Weinstein, CEO of Phipps Houses

Affordable housing experts talk systemic change

Affordable housing experts talk systemic change
Barry Sternlicht (Getty)

Barry Sternlicht predicts “tipping point” for NYC

Barry Sternlicht predicts “tipping point” for NYC
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...