The Trouble with Tenants
Ok time to fess up...... tenants are often:
- Unskilled in property
- Transactional
- Price obsessed
- Badly advised
- Impatient
- Hypocritical
- Ego driven
- Two dimensional
- Difficult to reach at a senior level
They also
- Expect the world
- Over complicate projects (especially design)
- Twist in the wind
- Don’t engage with the marketplace much
- Decide by committee
- Monopolise the roof terrace
But now the sanity check…
Tenants aren’t in the real estate business (well the vast majority of them). They are operating in different markets with different pressures and, to most, property is just a support function.
Painful lessons in the past have taught them that real estate is adversarial, so they treat it as such. They see space as a commodity, to be bargained down to a base level, a risk to be mitigated. They don’t see potential partners who can support their business growth and they certainly don’t see added value. A view reinforced by the lack of strong brands with common platforms, clear service offerings and accepted metrics to sort the wheat from the chaff.
Engagement takes time and resources, distracting from BAU objectives. Tenants are deluged by sales pitches from across the CRE spectrum. There’s a new D&B supplier for every day of the year and an endless stream of cold calls sniffing out new requirements. Saying yes too much means sinking in calendar quicksand. So it reaches the point when it's easier to just pull up the drawbridge and get on with the day job.
In the end tenants are human (or at least a human construct) and hey, a lot of them don’t even see themselves as tenants. But most of them have long standing valued partnerships with other suppliers where interaction is detailed and regular and the level of trust is good. Some of them work hand in glove for years.
So when you can’t get the traction with a new scheme, or the engagement you are seeking to develop it, first understand the flaws in the traditional model as a whole.
"It's not the customer's job to know what they want" - Steve Jobs
There are plenty of signposts for what is required of CRE. Look at the trends on ways of working, speed of delivery, contract flexibility and amenities. Listen to your own survey results and the real thought leaders in Workplace.
Just don’t blame the customer, unless you still want to be scratching your head over a broken pipeline in ten years time.
organise by committee? that's a new one? unless you mean "board meeting"?
Experienced Property Consultant managing a 26 acre park with all of its many challenges and great customer relationships.
3 年Another inspiring article Chris Early. During my 25 + years in the industry, there has always been a distrust between the customer and the provider, with the former thinking the latter is trying to fleece them at every opportunity. As Paul Richardson says providers are changing their images which we've seen with the amount of customer research which now goes into the product design and thinking. The likes of David Aspin, CEG:, Bruntwood are great examples of longer term partners with a loyal customer base. Agents and brokers are becoming extinct as the 'market' moves towards more long term strategic partnerships with quality advisors however this has to be recognised in the renumeration agreements and as you rightly say with access to decision makers. This is an excellent time to partner up for the long term and really effect change for most important element in any business - the staff.
Independent Management Consultant with expertise in Corporate Real Estate and Location Intelligence PEOPLE - PLACES - SUSTAINABLE SUCCESS
3 年Chris Early agreed. Many (ok very many) years ago when I was a broker, I was taught that the best negotiations left both parties feeling they had 'won' particularly as the 'deal' on the lease was just the start of a long term relationship. In most other areas of business you pay for the service your receive- the traditional lease does not allow for that - are you hopeful that that is now changing? ??
Asset Manager at Commercial Estates Group
3 年The industry is changing (slowly). There are self-aware, forward thinking Landlords who embrace the customer orientated partnership approach that is needed. The conduits for communication between building owners and occupiers needs to evolve to facilitate better interaction.
Architect and Project Manager
3 年Reading your piece there are parallels with retail landlords. However, the balance has shifted considerably in the last 5 years such that retail landlords now need to bend over backwards to help their tenants. This is partly due to the financial pressure but also that landlords have bullied retailers into constricting circumstances, now tenants have more choice.