Here’s what the office industry is up to as lockdowns lift

TRD NATIONAL TRD ISSUE /
May.May 22, 2020 01:00 PM

As lockdowns lift and the work-from-home debate ranges on, office landlords are eager to get back to leasing and building out their spaces.

“We have various construction projects we want to get back to,” said Grant Greenspan, senior vice president of leasing at the Kaufman Organization.

In New York, all nonessential construction work and in-person real estate showings are on hold until Gov. Andrew Cuomo gives the green light for those activities to resume. When they do, Greenspan acknowledged there will be challenges with showing commercial spaces.

“Obviously, it’s a little more tricky if the tenant is occupying the space,” he said. “We’re going to have to be more cognizant of their concerns.”

In the meantime, office leasing brokers have been doing their best to adapt to virtual showings. Stephen Schlegel, market director for the tri-state region at JLL, said the lockdown has pressed brokers to try new technologies quicker than they would have otherwise.

“We can’t imagine a set of circumstances that would have pressed us to develop those technologies the way we are now,” he said.

One of the big questions around virtual showings is how willing tenants are to lease spaces of significant size without ever physically visiting them.

Ryan Simonetti, CEO of the flexible-workspace and conference-space company Convene, said his company has long offered visual tours of its spaces. In the past several weeks, the number of deals done virtually has become much larger, as members seeking the flexibility of short-term commitments sign up.

Simonetti said members are more likely to close an all-virtual deal up to a certain point: usually for about 10 or 20 people, maximum. After that, he said, it becomes a harder proposition. “We are seeing people’s appetite to consume space digitally growing,” he said. “But it’s a different story for bigger requirements.”

JLL’s Schlegel said it will be some time before brokers return to the old ways of doing business.

“Given the restrictions on going to buildings, the notion that you’re going to take tenants to six buildings a day is just not realistic,” Schlegel said.


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