A recent front-page story in The New York Times portrayed a dire situation for big-city commercial real estate owners: As the COVID pandemic winds down, companies that last year shifted overnight from office-based work to home-based work are likely to continue with that change. Office vacancies in New York City have climbed to the highest rate in several decades, market value has plummeted 25 percent, tax revenue from real estate has fallen accordingly and large companies – ‘JPMorgan Chase, Ford Motor, Salesforce, Target and more’ – are reducing their corporate footprints. JPMorgan Chase CEO Jamie Dimon predicted that his company – the largest private-sector employer in New York City – may continue to need only 60 seats for every 100 employees as they embrace remote or hybrid work.
It’s not just New York that is feeling this pain, cities around the world are seeing a similar pattern. Vacancy rates in the City of London are now at their highest in five years, according to retail data consultancy Local Data Company (LDC).
The financial district, home to both the Stock Exchange and the Bank of England, has been hit hard by the crisis and saw 255 vacancies to the end of 2020, as office workers stayed home. For landlords, this clearly is a time fraught with financial risk. But for tenants, it’s an opportunity to optimise their real estate portfolios. And when optimisation is the task, an Integrated Workplace Management System is an essential tool.
What makes an IWMS so essential?
For anyone taking a strategic look at their organisation’s real estate portfolio, the first obvious need is a global view that allows you to see active leases, expiry dates, options for early cancellation or modification, etc. Taxes, fees, common area maintenance and other built-in operating costs are must-have insights too. In addition, you will want to see amenities and perks offered at various leased locations. A solid lease administration system may be able to provide all of these items at a lower cost than an IWMS, but to get a complete picture on which you can base important portfolio decisions, you need more.
Facility Management, Technology & the Future of Work
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Not all costs are embedded in leases. And not all leases are about real estate. Many organisations have significant amounts of leased equipment, for example, that may be handled by departments rather than the enterprise, but which nevertheless contribute to the overall cost to the organisation.
What are the non-lease operating costs for each of your leased locations? Energy and other utilities, cleaning, employee reimbursements for parking and other expenses should be tracked in a manner that allows for easy, straightforward aggregation of costs.
Determining whether to maintain a location depends on more than just costs. It’s a strategic decision for the enterprise that will affect operations for years to come.
How well is a property utilised? How convenient is it for the workers assigned to the location? Does it have the right amount, type and size of space for the way it is being utilised? These important questions won’t come from examining the lease. They require a space management system and possibly add-ons such as a wayfinding solution.
Space Management Needs around Health & Safety and Hybrid Working models
As space planning priorities have shifted from densification to ensuring worker health and safety, businesses need more complex views of information to ensure that workplaces support policies and regulations. It may be too early to know whether 2020’s social-distancing requirements continue over a longer term, but they are still today’s reality. Enhanced cleaning regimens, availability of amenities such as hand sanitiser and disinfecting wipes, and similar changes seem destined to last at least into the mid-term future. Monitoring of actual occupancy has become a priority as well, so that organisations can determine potentially risky pockets of activity that may need to be remedied.
The trend toward hybrid working also suggests a continuing need for measures for seat assignment such as convenient reservation systems. Employees who are only coming into the office once or twice a week may not need full-time desk assignments, but they do need the ability to be certain that a desk will be available when they arrive. They will still want a workspace that is convenient to the tasks and the colleagues they need to interact with, have the appropriate level of privacy for the work, etc. Depending on the organisation and the location, those reservations may trigger enhanced cleaning the night before, for example.
Revamping the workplace for new kinds of occupancy may generate projects to alter furniture layouts, create new places for collaboration, and alternatively isolation, and to move existing employees’ desks and belongings. Beyond that, managing worker equipment when it is housed off-site in worker homes poses different challenges from on-site management.
A Single, Workplace-Centric System
Now it could be argued that dedicated systems for each of these components can get the job done, and that business intelligence systems and data lakes can aggregate the information for global reporting. And that would be an accurate statement. But more compelling is that a single, workplace-centric system – an IWMS – can eliminate duplicate and/or inconsistent data-tracking, ensure visibility of accurate information across organisational boundaries and allow comparisons to be made based on equivalent information. This is not a new argument, of course. In fact, it has been a core value proposition of IWMS ever since these systems came to be. But there may never have been a time when the need has been more obvious.