You Can Be “The Landlord” or You Can Provide “Space As A Service.” Choose Wisely. Why? Because your career and future livelihood will depend on it.
It’s not changing, we are not in a state of flux and do you know why. The marketplace has already decided.
They want, no, they demand commercial real estate provide them “space as a service.” Now, unfortunately, part of commercial real estate still thinks that being “The Landlord” is the position of power and the only way to create true value.
I disagree and did not hold back when that fact presented itself to me just recently.
3 Reasons A Landlord Might Shut Down Your Open Office Plan Oh Really!
“That’s the society we all want right, especially in 2017. We want THE MAN telling us not only when and where we work but how we should move our little cubicles, chairs, and desks. And I am not making this up. Also, THE AIR WE BREATHE. Hey, are you using too much air in your office? STOP THAT. It costs ME, THE LANDLORD penny’s. You do not cost THE LANDLORD penny’s not without The MASTER’S authorization.” – Duke Long
What connotations does that imply? Many and none are good for anyone except of course, “The Landlord.”
So, if “The Landlord” model is now GONE as a way to compete in the real market of today, what is “Space as a Service?”
If you want a deeper dive please read my friend Antony Slumber’s article titled, #SpaceAsAService and Its Consequences. It’s a quick concise and brilliant read.
“In this world, purchasing flexible space, Space As A Service, becomes an obvious response for individuals and companies. And just as it is technology that changes behaviour, not the other way round, so it will be that this demand leads to a change in the nature of supply. Put simply, the real estate industry is going to be forcibly moved from being a rent collector to a service provider.” – Antony Slumbers
That last sentence. Should I just stop here and say thanks for reading, good luck?
Let me ask you this, do you see it now in your market? Is it staring you in the face?
Let me give you a simple example. WeWork.
Yes I know, a couple of years ago I asked, “What Is The New Future Commercial Real Estate Brokerage Model? Hint: It Does Not Include A Broker.”
Basically, I stated that WeWork was the best new brokerage to come out in the last ten years.
“WeWork has a “Platform for Creators.” A platform that directly faces the user….wait I mean tenant. They directly provide that user a dizzying array of services that user can choose from. They allow that user to pay them directly ( the more I write about this the more pissed I get that I/me did not come up with this idea and I am “the cre tech shit” how?) and know exactly when where and how they are using “space” commercial real estate space. They have a relationship with that user. A relationship you do not have and may not ever have a chance to develop .” – Duke Long
So, WeWork is the best brokerage model and now maybe the best landlord model. How about WeWork is now the best “Space as a Service” model. Think about this for a second. Best Brokerage Model and Best Space as a Service Model.
Wow, a pretty powerful position to be in if you ask me.
What if you are a building owner today? What can you do today? Let me ask you this. What if a building owner collected data? What data? Tenant data. You say well that’s obvious. How about tenant data that is not their own, YET.
What do I mean?
Here is a scenario. A building owner goes to the five top potential tenants or prospective users and asks to collect data about their current space and how it is being used. Why? So that building owner can better understand the real world actual uses and needs of that potential tenant.
What if that potential user never becomes a signed tenant? Who cares? Well, of course, you care. What if they do? Who has the advantage in securing that potential tenant? The cycle of due diligence becomes ZERO, as in ZERO turn around time. That new “land lord” already has all the data necessary.
Let’s think a bit farther out. How valuable is that data now?
Do you think it will be hoarded? Who owns that data? The current building owner? The tenant or the company collecting it? Wow, big question. I am pretty sure they will all say ME! We own it, it’s ours.
How much value is being created again, from what? Data. Building and Tenant data.
If I were a building owner today I would think about what? Being the LANDLORD of the building or The LandLord of the Data. (How many times have I written that phrase over the past six or seven years?)
How about WeWork again? They are starting to become enterprise service providers .
Don’t believe me? Watch the video.
So, WeWork is the best brokerage that is becoming the best building manager, and now they are becoming the best space as a service provider.
If I were a “Landlord” I would sit back and FREAK OUT.
You might say, “that technology stuff means nothing.” Oh, I agree. Why even pay attention? You got this.
WeWork seems to be doing ok with it so far. They are just in the “Space As A Service” business. The rest of commercial real estate thinks being the LANDLORD is how value will be created forever.
I think NOT. Wait I Know Not.
You Can Be “The Landlord” or You Can Provide “Space As A Service.” Choose Wisely.
+1 Did I mention WeWork is developing their own buildings also? They have been for a while.
+1+1 Sit back and wait for the 20-year triple net lease. It has to be out there.
+1+1+1 You know who your only customer for that 20 year NNN lease may be?
WeWork. Ironic, don’t you think!