Inside CRE Tech • Episode 6.2

The Challenges of Workplace As A Service

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Top CRE executives discuss workplace as a service.

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Video Transcript:

Tama Huang, Chief Innovation Officer, CohnReznick

Current challenges facing workplace and service.

John Gilbert, EVP, COO, CTO, Rudin Management

I think the big issue for workplace as a service ultimately is staying relevant.

Gabrielle Rubin Deveaux, Global Real Estate & Facilities, Buzzfeed

The one thing you really want to always remember is that you maintain your brand.

John Gilbert, EVP, COO, CTO, Rudin Management

I think it's scale.

Gabrielle Rubin Deveaux, Global Real Estate & Facilities, Buzzfeed

Some of the challenges for these workplace services are relatively new so there's a lot of kinks to kind of work out. They might be great at building this base but can they also be good landlords. Do they have the infrastructure that supports your business and how you work? And every company is different it's not necessarily a one size fits all.

Hussain Ali-Khan, Global Alliance Director, CBRE

The challenges that I hear from my clients, are things around employee experience right. Is it going to be generic, the way that you know whatever workplace is a service provider we use is going to do it. I think another challenge is technology and security. Cybersecurity is a really really important issue and it can be very expensive to put your own security in there. Now, I think there are ways like virtual desktop and virtual desktop services that can sidestep that issue, but I think that's a very important challenge for workplace as a service.

Tama Huang, Chief Innovation Officer, CohnReznick

When you think about companies like what WeWork has done, is they’re really selling an experience, because when you go to WeWorks you are not using it as a workplace as a service. You are agreeing to their experience. You're buying the experience you're not buying a service.

Kent Tarrach, VP, Asset Management & Global Corporate Development, Brookfield

And the other challenge is putting the proper documentation in place and understanding how to incorporate workplace as a service from a position that it's complementary to our traditional long term leasing and not a competitive to it. And I think those of us who've been spending a lot of time in that space have recognized that that is the case, but it is a change of thinking and it's taking some time for the market as a whole to kind of wrap their heads around that. So it's more I would say education than anything. The challenges around workspaces a service or workplace as a service is more on the landlord's side than it is on the occupant side. The occupants have been saying for years that they would like increased flexibility as they think through their space needs.

John Gilbert, EVP, COO, CTO, Rudin Management

And I think the challenges are convincing people” “OK, should I go to a Knotel, or should I go to a WeWork, or should I go to an Industrious?” That's up to those three companies to figure out how to create a glue to keep people, and be attractive to grab people before they go someplace else.

Adam Stoltz, National Director, Consulting Services - Transwestern

One challenge facing workplace as a service is in the partnership ecosystem, that's associated with the access to and the use of space today. And so that's everything from commercial real estate services firms through to design firms and to the technology providers that help bring workplace to life. So figuring out how to reconsider those partnerships, if in fact there should be partnerships that help you deliver those things are certainly a series of challenges that are being explored.

Tama Huang, Chief Innovation Officer, CohnReznick

The other thing that comes in, in terms of the challenges, is that every owner of space is now a supplier right. So if you have space, you could become a provider of workplace as a service just like any person with a car can drive an Uber.

Hussain Ali-Khan, Global Alliance Director, CBRE

Another challenge for workplace as a service is probably going to be around the economic cycle. I think the workplace the a service companies have grown up in a rising economy since 2009. And so, if we have some sort of a disemployment event, how will that impact workplace as a service companies? Some say that it could be good for them, because now those who are unemployed will need a place to work or may choose to start companies. Right. And I think that's a very valid argument because that's how these things started in the first place. Workplace reduction by major corporations might have an impact on those workers and service companies whose business model relies more on corporate activity than it does on say individual or startup activity.

Kent Tarrach, VP, Asset Management & Global Corporate Development, Brookfield

On the landlord's side, the challenges that we've had around that are in the public markets, getting financing on buildings that have a level of flexible workspace incorporated into them. The banks don't necessarily understand, you know, shorter term leases or don't like seeing that in the rent roll as much as a long 10 year lease.


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