Commercial Real Estate’s Lack Of Innovation

Posted by LDG - The Creative Property Agency on 5th June 2020 -

There has been a lot of talk on how innovative the commercial real estate have been undertaking virtual tours and videos for the lockdown, but having looked for such tours to send onto a client, I am questioning how true this is in reality.

Firstly it must be highlighted that many of the “innovating” technologies being used now due to coronavirus, are by no means “new” nor exactly innovating as other industries, including our residential cousins, who wipe the floor with CRE when it comes to utilising tech.

Office buildings with higher vacancy levels and large floor plans seems to have it covered, which is great but in truth is more a reflection of higher marketing budgets which were already in place, rather than overhauling marketing tactics in reaction to lockdown.

That isn’t to suggest such tactics shouldn’t be praised, but with the general consensus forecasting businesses, particularly larger organisations, will be downsizing in the short-to–medium term due to the economic impact of Covid-19, why haven’t more of our industry peers catered for businesses who are looking for smaller office space?

When coronavirus first started to grip the UK, job losses were predicted early on, weeks before Lockdown was issued. This is a key reason why the Government stepped in to protect jobs through the Job Retention Scheme, to avoid significant job losses.

The Governments efforts have been highly praised, and the decision has certainly saved a lot of jobs, at least in the interim. However, the reality is many businesses will be considering their occupational strategies and staffing levels, with demand for downsizing to a smaller office space a likely consequence of this.

Whilst some other agents concentrate solely on catering large institutions, the SME market plays a core role in a number of our commercial department’s strategies.

Our experience is that such organisations have always had an ability to react fast. Decision making is a lot quicker, and they are also a lot more open to changing their plans as there are less factors to take into account. They are also less likely to have dramatic change to the size of their workforce, with employees tending to have a lot more multifaceted responsibilities.

This creates a perfect micro market to concentrate on, especially in unprecedented times. In fact, our most active applicants and leads during lockdown have been businesses seeking sub 3,000 sq.ft.

We moved quickly before lockdown to video (almost) all of our instructions, from 1-2 person offices upwards to our largest instructions.

(a snapshot of Agents Insight, a CRE platform we use to host and upload our listings online. The purple icon indicates virtual tours for browsers)

They were by no means our best given the time and access restraints, filmed on our mobiles for the most part, but the impact has allowed us to proficiently engage whilst working from home, no matter the size of the organisation we deal with. It has also been further enhanced by property portals reacting quickly to make changes that help consumers identify properties with virtual viewing tours on their platforms.

Click here to check out our Youtube Channel and our video walk throughs!

Whilst it sure feels nice to clap ourselves on the back, especially considering how cost effective it proved to be, the bigger discussion is whether this indicates a wider issue in the arguably slow reacting industry as a whole to truly “innovate”? True industry innovation comes from technologies being used a standard, not just saved for the biggest and best.

Part of the reason for this comes down to cost, and ultimate who should swallow the cost for virtual walk-throughs and professionally made videos.

It’s a hard question to face especially when, like us, marketing costs are incorporated into our fee structure, and not charged in addition as some firms do, and one we have had a few too many team Zoom calls discussing!

Nonetheless, the impact of Covid-19 means businesses have been forced to think outside the box, and hopefully continue to widen their “innovation” as we start heading back into a (sort of) normality. I am personally hoping it continues to create a whole new ‘standard’ in Commercial Real Estate.

In the meantime, I will continue to seek out those elusive virtual tours to provide a vital service for my acquisition client.