85% of Landlords Lack Visibility Into the Building Updates Tenants Require to Safely Return to Work During COVID-19, According to 2021 VTS Global Office Landlord Report
—Second Annual Report Showcases New Research On The Strategies Landlords Are Using To Navigate COVID-19 And Beyond—
NEW YORK–(BUSINESS WIRE)–VTS, the commercial real estate industry’s leading leasing, marketing, and asset management platform, today released the 2021 VTS Global Office Landlord Report, which features key insights into the priorities and strategies executive leaders at landlord companies are focused on to navigate the challenges of the pandemic and ensure business continuity post-COVID-19.
Commissioned from an independent market research firm, the report is based on a global survey of 154 top industry leaders. According to the research, COVID-19 has accelerated the evolution of trends that were already unfolding within the industry, in particular, shifting tenant expectations, increasing technology adoption, a rise in flexible space offerings, and the necessity of digital marketing. The results also make clear that while landlords understand the urgent need to facilitate a safe return to the office for tenants, they lack a clear understanding of the specific building investments or features tenants require.
“Our industry is grappling with the biggest recession and public health crisis in recent history, and we don’t expect those challenges to disappear anytime soon. It’s never been more important for industry leaders to share information and best practices for the greater good of the industry,” said Nick Romito, CEO of VTS. “This new research indicates that for the foreseeable future, commercial office landlords will need to proactively manage their business recovery, continue to focus on and even reinvent tenant relationships, and modernize their operations if they are to emerge from COVID in the best position possible. Ultimately, the landlords with the right technology, data and marketing investments will be the ones best positioned to win during the pandemic and beyond.”
Key takeaways from the report include:
Commercial real estate executives are laser-focused on mitigating the risk of COVID-19 in 2021:
- The top two business priorities identified by landlords in 2021 are: Maintaining tenancy across the portfolio and mitigating the financial impact of COVID-19 due to rent relief, deferrals, and defaults.
Landlords are increasingly realizing the necessity of technology and data as they manage their businesses and create the best leasing and investment strategies:
- 77 percent of landlords agree that technology is critical for managing their businesses in the wake of COVID-19.
- Amid the uncertainty and volatility caused by COVID-19, real-time market insights have never been more important, yet only 6-percent of landlords surveyed completely trust the data sources they use to get market information today. Why? Their number one problem with the market data sources they use today is that they contain lagging indicators.
Managing tenant relationships and the ultimate return to work is high on the list of priorities for landlords, yet they don’t have the information they need to successfully facilitate these outcomes:
- 85-percent of landlords aren’t sure they have adequate visibility into what investments or features tenants require in order to safely return to work during COVID-19. At the same time, they’re making massive investments in air filtration systems, touchless building entryways, and building management systems.
- 86-percent of landlords say that they do a good job engaging and communicating with tenants across their portfolio today and 64-percent of them also have a technology platform in place to track those relationships and interactions. Yet only 20-percent of landlords have full clarity into their exposure to tenants at risk of economic failure.
Landlords recognize that digital marketing has become a necessity to keep the leasing process moving forward and are investing in it:
- 73-percent of landlords agree that digital marketing tactics have become necessary to market available space post-COVID and nearly 60-percent say that tenants expect a virtual space tour before committing to an in-person tour.
- Not surprisingly, landlords’ biggest marketing investments this year include virtual tour technology, online marketing technology, and digital photography and video content.
Investing in flexible space/coworking remains an important aspect of landlords’ portfolio strategies:
- The percentage of landlords who expect to dedicate more than 10 to 20-percent of their portfolios to flexible space in 2021 vs. 2020 has more than doubled.
Survey respondents consisted of senior leaders with 51-percent of respondents holding the title of Director of Executive-level and 76-percent having managerial responsibility. All respondents were budget decision-makers in commercial office real estate leasing with a wide range of portfolio sizes. 52-percent of respondents represented office or mixed-use portfolios larger than 15 million square feet. 79-percent of respondents worked in the U.S. while 21-percent worked abroad. The study’s margin of error is +/-7.8-percent at the 95-percent confidence level.
Download the full 2021 VTS Global Landlord Report here.
VTS is commercial real estate’s leading leasing, marketing, and asset management platform where the industry comes to make deals happen and real-time data comes to life. The VTS Platform captures the largest first-party data source in the industry, which delivers real-time insights that fuel faster, more informed decision making and connections throughout the deal and asset lifecycle. VTS Data, the industry’s only forward-looking market dataset, and VTS Market and Marketplace, the industry’s first integrated online marketing solution, give landlords, brokers, and tenants unparalleled visibility into real-time market information and the direct connectivity to execute deals with greater speed and intelligence at every point in the planning, marketing, leasing, and asset management cycle.
More than 60% of Class A office space in the US and 12B square feet of office, retail, and industrial real estate globally is managed on the VTS platform. VTS’ user base includes over 45,000 CRE professionals including respected industry leaders like Blackstone, Brookfield Properties, LaSalle Investment Management, Hines, Boston Properties, Oxford Properties, JLL, and CBRE. To learn more about VTS, and to see our open roles, visit www.vts.com.
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