Author: Anita Turner

Almost two years into this blog, I am frequently asked where I get information.  Like most people, my answer is “The Internet.”  It is not, however, “The Google Machine.”

My blog probably makes it obvious that I love research, but I research not just out of curiosity, but because I believe it is essential to learn as much as I can about my industry as well as the industries and issues of my clients.  Consequently, whether I am just catching up on what is happening in commercial real estate or looking for specific insight relevant to a client, I frequently turn to the following websites that I find to be reliable, well-researched sources of information.

Furniture Companies

Office furniture manufacturers spend extensively researching trends in workspace design and utilization.  As such, their websites are fonts of information to a tenant representative like me.  Two of my favorites:

• HermanMiller – Case studies, white papers like Measure What Matters about the new benchmarks being measured in workspaces.
• Knoll – Workplace research and insights including a personal favorite on Immersive Planning: An Experience-based Workplace.

Office Architects

International architecture firms Interior Architects and Gensler invest heavily in research.  Both firms also utilize their extensive client bases to gather information and feedback.  Gensler even has internal research grants for which its employees can apply.  These grants can be used to research areas of interest to particular industries or functions.

• Interior Architects – Podcasts, white papers and blog posts including this one entitled Brand + Culture + People = Place.
• Gensler – White papers, case studies, and original research like the 2013 U.S. Workplace Survey.  (Yes, this 2013 survey piece is still relevant because Gensler is always ahead of the curve. )

Accounting Firms

The big four accounting firms’ websites contain white papers on subjects as varied as human resources, telecommuting and the effects of AI on the global workforce.  Check them out:

• Deloitte – Deloitte University Press publishes research on work environments, diversity inclusion and virtually any other workplace idea you can ponder.  Deloitte recently published Millennials in the workplace: Myth meets reality.
• KPMG – Research on different industries and services including their recent report Women in Real Estate.
• PWC – Insights on various topics including this 2017 lease accounting survey: implementation progress report as well as pwc’s annual CEO Survey.
• EY – Insights on timely subjects like What are the hidden risks of contingent workforces?

Consulting Firms

Lastly, consulting firms develop and publish in-depth reports that would impress Ivy League professors.  Maybe that’s because they are often written by them.  My personal favorites are Bain and McKinsey.

• Bain & Company – In addition to their website, Bain has also developed a Bain Insights app.  Recently, Bain published New Bank Strategies Require New Operating Models, a thorough brief on changes in the banking industry.
• McKinsey – Features articles on different industries and functions including such titles as The CEO guide to customer experience.

Happy researching!

As a tenant rep, I strongly believe it is my responsibility to educate my clients on what others in their industry are doing.  To that end, I do law firm benchmarking to let my legal clients know how much space their competitors are using per employee and per attorney.  Similarly, I let my financial institutions and other clients know what the standards are in their industries.

The purpose of sharing benchmarking information is not to dictate how my clients use space.  Rather, I aim to help them make informed decisions as they build out, renew, or downsize space.  Their needs might be unique from the rest of their industries, but it may be helpful to know that their competitors are using less space, and, as a result, they have lower real estate costs.  If my client is competing in an industry with thin profit margins, for instance, this information may be extremely material to their planning.

Benchmarking data can also help clients plan for the future.  Let’s look at the banking industry as an example.  In the past, banks have been known for high end finishes and spacious offices.  Because of all of the changes happening in the regulatory arena, banks are now looking at ways to cut costs and operate more efficiently.  Reflective of this trend, BBVA Compass built out a new executive headquarters in Houston with an entirely open plan.  Similarly, JPMorgan’s tech operations in New York City are not only open plan, but they are entirely free address.

While many small and mid-size banks are not yet ready to embrace the open plan, I still want to let those clients know where the industry is going so that they can plan for the potential changes down the road.  Maybe this means they build out new space with demountable walls so the space can be reconfigured as space usage changes over their ten-year lease.  Or maybe they sign shorter-term leases or negotiate for termination rights so they can more easily restack elsewhere as their needs evolve.

I had lunch with one of my commercial interior designer friends recently.  (As my regular readers know, I love the architecture community.)  This designer, Tracy Engel with ASD|SKY, told me about a project she had recently completed for a national financial institution in Birmingham, Alabama (hereafter, “Bank”).

Bank wanted to consolidate operations from leased space into their owned building nearby.  ASD|SKY was asked by Bank to restack several floors of that building.  Their directive was to design a more efficient space that was not only conducive to collaboration but that would also enhance – not hinder – productivity.  This was a pretty tall order.

The floorplates in Bank’s building were approximately 14,500 square feet.  Before the restack, the density per employee was approximately four employees per 1,000 square feet.  After the renovations, the density was approximately 6.5 employees per 1,000 square feet – an improvement of more than 63%.

Assuming five floors were restacked to this density, employees that used to occupy 118K square feet now occupy only 73K square feet.  If you further assume a market rental rate of $23 per square foot, this is an annual occupancy cost savings of over $1M.  Thus, the long-term occupancy cost savings this generated for Bank across a number of floors was significant.

ASD|SKY achieved this improved density by opening up the floors and placing all employees in bench-style seating.  Huddle and collaboration rooms were sprinkled throughout and a café was built along the window wall on each floor.  All of these alternative spaces were equipped with wi-fi and abundant power sources so that they could be used by the floor’s employees as alternative workspaces.

Prior to the restack, the employees designated to move to these open plan floors were dreading losing their offices.  However, Bank’s employees now love the space.  The amenities are extremely popular and some of the employees actually mentioned that they think they are more productive now than when they had offices.

Why was the restack so successful?  I am sure it is a combination of the design and change management.  Much care went into crafting inviting and comfortable spaces and ensuring that daylight permeated the entire space.  The café seating faces out on full height windows with great views of downtown Birmingham.  And, prior to the move, Bank trained all of the employees in how to use the technology on the floor while ASD|SKY cooperated with Bank to help employees understand how to work courteously and effectively in an open plan.  (Read some ideas on that here.)

Do you know where you benchmark relative to your competitors and your industry?  Maybe you should call a tenant rep.

When I represent a client looking for new office space, we compile a market survey of all of the building options available which meet their needs.  Together, we cull this list to the top 4-5 and visit those buildings.  Often, we then cut that list to two or three buildings and revisit them, spending a little more time inspecting the various spaces.

At this point in the process, I find it very helpful, especially with full floor or larger requirements, to have my tenant’s project manager or architect along on the tour to identify challenges or opportunities that would go unseen to the untrained person.

A good project manager will check whether the floors are level, how far apart columns and window mullions are spaced, and window sill depth and height.  They will also look at mechanical, electrical and plumbing (MEP) issues including the electrical capacity in a space, whether the HVAC systems and distribution are current and sufficient to handle the load created by the contemplated use, the existence and placement of sprinkler systems and the ceiling tile type and size.

All of these factors can have a profound effect on design.  For instance, I recently toured a two-floor tenant space in a high-rise building where the floors sloped six inches from window to core.  This flaw was not discovered until construction had begun and a project manager was brought in.  Thankfully, the design and project management team was able to find and use a flooring that would work over an uneven surface. However, you can now roll a ball from the window to the center of the space with ease.  This is not ideal.

One of my clients had a project manager inspect its prospective space prior to lease execution and the project manager discovered that the HVAC system in place was both dated and insufficient.  With this knowledge, we were able to renegotiate the lease language to have the landlord cover all costs related to upgrade of the HVAC system and related ceiling work.

Even window mullion placement is important because it can determine office size.  A lay person might not recognize this issue but an architect or project manager will be able to assess possibilities and limitations quickly.  They will also ensure that building standard window coverings meet the tenant’s needs for both light and heat filtering.

A project manager or architect can also evaluate the ease of equipment and HVAC installation in a potential space as dictated by the size and location of elevators and the existence (or nonexistence) of a loading dock.

Most tenants are well-served to have their own architect and/or project manager help them throughout any buildout.  If you are considering a move or a new office, engage such a professional before you complete your negotiations on your lease so that the information gathered can be accounted for in those negotiations.  You will not regret it.

As a bonus, they can also help you negotiate an ironclad work letter.

If your company leases space in an area impacted by Hurricanes Irma or Harvey and your leased property was affected by either wind or water damage, your landlord is probably doing everything it can to get your building back to normal operations.  That said, you should check the following three areas of your lease to ensure that you understand your rights and obligations post-storm.

Interruption of Services

Almost every lease has a clause governing interruption of services which typically encompasses interruption of power, trash removal, et cetera.  In most leases, the landlord is not liable for damages or loss of use when the interruption is the result of causes beyond landlord control.  Occasionally, however, rent will abate for the duration of the interruption.  This can be important to you if your building was not damaged but power is out for a sustained period.

Casualty Repair/Termination/Abatement

Most leases also contain a clause addressing what happens if the building and/or premises are damaged by casualty which would include hurricane.  Typically, if your building or premises are damaged, the lease will state that all or a portion of your rent will abate until the premises are habitable for the purpose of doing business again.  If your operations are on a higher floor of a building and you have no window damage, this clause may still apply if the building’s lobby level was flooded, necessitating reconstruction or mold remediation.  If this activity affects access to the upper floors, you may be entitled to abatement.

Occasionally, if the damage is severe or projected to take more than 6-12 months to repair, the landlord (and occasionally the tenant) may have the right to terminate the lease.  This termination right will only be relevant where the damage was quite extensive.  Make sure you understand whether your lease grants you the right to terminate and know the notice required to exercise them.

Personal Property Damage

Finally, most leases require the tenant to ensure its own personal property including furniture, fixtures and equipment.  If your company’s offices were flooded and personal property was destroyed by a storm, you will need to make a claim with your insurance company to recover these losses.  You will also be responsible for procuring replacement furniture and equipment to get operational again in new or restored space.

When I was in business school at UCLA, I had a professor (Jen Aaker, I’m looking at you) who was also the advisor for my field study project (the B school equivalent of a thesis).  Her emails to our field study team always started something like this: “Hi.  Enough small talk.”  She was my people.  We got each other.

Fast forward twenty years and I find myself living in Birmingham.  I get a phone call from my now-partner, Joe Sandner III, who says he has heard about me from some of the brokers working for him and he wants to have a cup of coffee with me.  My former-lawyer brain starts immediately calculating how many tenths of a billable hour a “cup of coffee” will take because I have things to do.   Nevertheless, I agree and end up leaving the company I had worked at for fifteen years to join Joe and Colliers.  Why?  Because as Joe has taught me, “people do business with people.” Joe took the time to come see me and give us a chance to get to know each other.  In turn, I felt comfortable leaving my familiar environs to try something new.

Now I live out this advice on a daily basis.  I am out meeting with clients, prospects, and industry colleagues every single day.

Joe’s corollary to “people do business with people” is “pick up the damn phone.”  While I pride myself on my ability to draft a thorough and understandable email, I have seen the wisdom of picking up the phone and talking to someone to quickly work out an issue or get a question answered.

Finally, Joe has taught me to say “let me pick you up.”  It is so much easier to schedule a lunch meeting when you offer to pick up the person you are meeting for lunch.  This is especially true if the person you are meeting has to park in a parking deck at their office or if parking is scarce at your destination.  And, it gives you and your lunch partner additional time to discuss whatever is on the agenda for that lunch.  Just a simple touch but now a permanent part of my business etiquette repertoire.

So, get up from your desk and go see your clients.  Pick them up.  Take them to lunch and really listen to them.  And thank Joe on your way back to the office.