D.C. Office Leasing Leans on Virtual Tours for New Business


With Washington, D.C., currently in Phase II of its reopening plan, landlords around the area are focusing on enacting a health and wellness plan that enables a safe environment for their office tenants, staff and management.

This includes drafting new cleaning procedures, evaluating air and water quality, adopting social distancing measures, and ordering appropriate PPE for their buildings. 

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Some firms, too, are thinking outside the box in terms of showing office space in an effort to improve lackluster leasing numbers.

For instance, JBG Smith (JBGS) is partnering with OfficeTour, a D.C.-based tech company, to offer a new web application that allows the firm’s leasing professionals to virtually and interactively guide prospective tenants and their brokers through commercial spaces.

“The market is evolving, and we saw value in moving quickly and nimbly to deliver a creative and innovative solution,” David Ritchey, JBG SMITH’s executive vice president, told Commercial Observer. “OfficeTour enables us to continue actively marketing our spaces and building relationships with potential tenants and the brokerage community, even as the pandemic poses limitations to doing so in-person. We believe engagement is an essential part of the space procurement process.” 

OfficeTour technology allows leasing agents to actively walk prospective tenants through the asset, combining virtual tour capabilities with the ability to interact with and respond to questions and comments in real time.

“We wanted to complement what happens in real life, where personal interaction between parties looking for offices allows for discovery and deal alignment,” said Zak Kidd, OfficeTour’s founder. “Additionally, we wanted to prioritize the ability for the landlord’s broker to establish a real connection with the tenant driven by this integrated, collaborative experience.”

JBG SMITH is the first real estate company to use the application, with OfficeTour initially set up to showcase approximately 30 of its properties, including 1900 N Street NW in the District, 1101 17th Street NW in D.C., and 2011 Crystal Drive in Crystal City, plus a significant portion of its National Landing portfolio in Virginia.  

While the pandemic may have initially spurred the firm’s collaboration with OfficeTour, the program is expected to be an important component of JBG SMITH’s long-term leasing efforts. 

“The product allows JBG SMITH to more conveniently market our portfolio to companies that are located beyond the D.C. region and provides a more efficient option for prospective tenants that are evaluating a variety of potential spaces in the early rounds of their search,” Ritchey said. 

Randy Harrell, CBRE (CBRE)’s vice chairman in D.C., said the entire region’s office market has seized up, with two-thirds of it being dead demand or delayed demand, and this can be attributed in part to people not touring office space.

“We’re starting to see the delayed demand reengage, which is encouraging,” he said. “We’re seeing an elective upgrading of the quality of the office space and rent structure, and, now with the strain on capital, that is on indefinite pause. I think you’ll see very few businesses expand their space, while they may have been thinking about it six months ago.” 

He said that in the last few months there were some last-minute minor re-trades, where landlords were asked for a lot and they gave a little at the 11th hour to get deals over the finish line.

The key to driving demand, Harrell noted, is enticing people to tour properties and reengage. And that’s being done with everything from virtual tours to limited physical in-person tours with a lot of protocols in place.

“In March and April, it was 100 percent virtual tours, and May, June and July have been more 50-50 with a lot of in-person tours taking place,” he said. “To entice people to physically tour buildings and reengage in the process, we’ve seen publishing of safe protocols and how people will be protected—what they can expect from the landlord’s side when touring and what we expect.”

That can be everything from sanitizing, to using masks and possibly gloves, to limiting the number of people. It all comes down to education and relying on safety measures, and that seems to be the focus of most landlords and potential tenants.

“Some buildings are limiting it to one representative to limit interaction,” Harrell said. “We’ve seen limited elevator capacity, with everyone taking separate elevators.”

Steve Singer, an analyst with Truss, an online platform that offers virtual tours, floor plans and other assets for more than 6,100 office spaces and over 110 coworking locations throughout the D.C. area, has seen firsthand the importance of virtual tours—especially during the pandemic.

“Virtual tours don’t just help tenants narrow their search and move through the leasing process more quickly,” he said. “They’re powerful marketing tools for listings. We’ve found that Truss tenants are 4.7 times more likely to shortlist and 6.4 times more likely to tour spaces that offer virtual tours.”