With the current increase in supply, do tenants have the upper hand over landlords?

With the current increase in supply, do tenants have the upper hand over landlords?

IWG's Executive Vice President Jeff Doughman talks about emerging trends in flexible workspace at the Bisnow Greater DC State of the Office Summit.

Washington DC has seen a real spike in commercial real estate in recent years, a development that shows no signs of slowing down for at least another 18 months. But with supply currently outstripping demand, does this mean tenants are calling all the shots?

Not necessarily, reckons Jeff Doughman, Executive Vice President at IWG, who was invited to talk on the panel of the Bisnow Greater DC State of the Office Summit on 10th September 2019.

"While the feeling may be that the tenants do have the upper hand, the reality is landlords are not changing the way they do business," explains Doughman. "Actually, tenants just want even more flexibility when they perceive the market to be in their favour."

Bisnow is a digital media company which produces newsletters and hosts events focused around the commercial real-estate market. The recent industry conference in Washington covered tenant demands, the co-working sector and the office of the future. Representing IWG and their brands, Doughman was invited to speak on the “Office of Tomorrow” panel where he covered the emerging flexible working trends and explained how it affects the different brands' customers and businesses (of all sizes). He also touched on what type of tenant amenities are most looked for when moving into a new building and how co-working spaces are changing in the future.

"The panel was a great opportunity for different points of view to be heard," says Doughman. "However, the general consensus is that one of the biggest trends taking hold right now is the ability for providers to enable their clients to conduct their business wherever and whenever they like.” In this on-demand world, prospective clients want to access the location and the inventory as quickly as possible, and often can’t wait for a face-to-face meeting. “They want to make same-day buying decisions for their workspaces and then they want to secure and use the product while on the go," says Doughman.

But how does this affect the flexible workspace sector in Washington? "Our clients are asking for flexibility in their term agreements and design, and specifically asking for a say in the layout and the office furniture. They're also looking to interact with their workspace provider with increased technology. IWG is listening and responding to our prospective and existing clients by providing the terms, space, location and interactive web application interface in the business," explains the Executive Vice President.

"People want more choice in locations and design than ever before in order to suit their changing needs. On some days co-working space is great, but on others that kind of environment doesn’t fit their purpose – say if they're pitching for new business and they want a more professionally appointed setting with business support services," says Doughman.

So what are tenants looking for in the flexible workspace of the future? "Clients now expect well-appointed lounges – aspirational common spaces that are multi-functional, so that groups can come together to collaborate and work on projects," he says. "It's important to have a multiplatform strategy to ensure the creation of a space that best suits a variety of tenant amenities such as wellness rooms, cafés and inclusive bathrooms throughout the space, and even small gyms to create a space that is much more than just an office."

This month, flexible workspace experts from IWG are continuing to participate in Bisnow summits in Washington DC, New York and San Francisco.

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