Presented By: Essensys
How Creating a Campus Effect Increases Tenant Retention for Landlords
Future Of Flex, Presented by essensys
Flexible office space is a key enabler of the work-from-anywhere and hybrid work schedules brought about by the COVID-19 pandemic. For landlords, to deliver on the growing occupier demand for flexibility requires more than one or two floors of flex space. It requires total building activation, where tenants can leverage flexible space and amenities within a building or across an entire portfolio.
The “campus effect”, as it’s increasingly being called, or flexibility at scale, is a new concept that landlords are beginning to implement as they look to stay relevant to current and prospective tenants.
Essensys, a global provider of software and technology to the flexible real estate industry, helps landlords and flex space operators establish, manage and scale flexible office propositions. The relevance of the company’s expertise is growing each year. Since its inception in 2006, essensys has managed more then 20 million square foot of office space across 170 cities globally, with current customers including Industrious, Tishman Speyer and EQ Office.
Partner Insights spoke to Chris James, essensys’ senior vice president of business development, about the campus effect and how the company’s software and technology are enabling landlords to implement flexibility at scale throughout their portfolio.
Commercial Observer: Give us a brief overview of essensys’ history and what the company does.
Chris James: Essensys was founded in 2006 before flexible workspace became mainstream. Our founder saw a lot of operational complexities that caused less-than-pleasant experiences for occupiers, specifically around the delivery of space and services in shared and flexible office environments. He created a product that simplified complexity to transform the occupier experience.
By early 2010, the market started to see a real boom in flexible workspace, and our platform was the perfect fit to enable the simple and efficient delivery of that office product. As flex started to grow, the software and technology grew and developed with it.
By 2019, what was commonly referred to as “coworking” started to evolve into, and blur the lines between, flexible workspaces and traditional office leasing. Landlords started to look at how they could provide a better, more flexible service offering. And with the impact of the pandemic, those landlords that aren’t thinking about flexibility, risk losing relevancy in a fast-evolving market. Our software and technology platform has evolved into the de facto platform used by the largest landlords and flex operators to run their flexible operations.
How does essensys simplify the complexities of running a flexible space operation?
We built a digital infrastructure foundation, supported by our private network and cloud infrastructure, that delivers secure and resilient services easily managed through software. With that capability inside the building, landlords are able to offer a wide range of services and exceptional, in-building experiences to their occupiers. That’s your internet, Wi-Fi, access control, voice services and signage.
Our platform also addresses space management — managing inventory, easily adapting space, and space analysis for monitoring the day-to-day operations of a space — and the space operations — including bookings, contracts, billing, cash collection, and different accounting exports — all the way through to the occupier experience —how tenants engage with and move through the entire portfolio, how they communicate with the building owner or operator, and how they engage with the community in the building.
As tenants look to take additional space, it becomes far more seamless for them to expand within a building, because that shift can happen overnight. If they’re in 5,000 square feet and need to move to 10,000 square feet, normally, they go to the market, find a new space, and spend three months negotiating a lease and then six months building out the space.
With essensys technology, tenants can look within their building and identify 10,000 square feet on the 12th floor. A landlord can turn off their space on Friday and turn the new, larger space on by Monday, with a seamless and secure connection to their network. This creates a consistent experience, even across different markets and geographies within a portfolio. It’s seamless because of the digital infrastructure and private network that underpin the entire offering.
Who are the company’s ideal customers?
We’ve historically worked with flexible workspace operators and continue to do so. But, for a few years now, there’s been a big uptick in landlord customers. Since the onset of the pandemic, we’ve been working more and more with building owners that are grappling with the challenges that we solve for. The true showcase of the software’s power is with landlords that have multiple buildings within a portfolio and want to connect those buildings and create a network for their tenants.
What do “flexibility at scale” and “the campus experience” mean?
Flexibility is a service offering — we’re aiming to create a consistent experience throughout a portfolio. For landlords, it’s one thing to look at a space and try to figure out how they’re going to manage and deploy that space from a service standpoint. But then, as they look at how 10,000 square feet can scale to 100,000 square feet within a building, then five buildings within a market, or a hundred buildings within a portfolio, they encounter compounding complexities.
So how they take that flexibility to scale and deploy it throughout their portfolio is a major challenge that we solve for without our clients having to build out large technology teams. A big piece of what we bring to ownership groups is the software and technology platform that brings it all together.
Then, the campus experience is establishing and marketing a network of buildings and offices that tenants can move between seamlessly, while staying connected to the same private network, no additional registrations or logins needed. The underlying platform gives them access to real-time availability and booking for space and other amenities. It really puts the power of choice and flexibility in the hands of the tenants, while helping landlords centralize and simplify the complex management of their office assets.
How exactly does essensys help companies scale their operation and create this campus experience?
Our technology connects buildings to the same private network — meaning that spaces and services in all buildings can be activated and managed in real time from a single platform. Tenants and employees can access booking systems for spaces, desks or meeting rooms across the entire portfolio with a single login. We’re helping landlords interconnect their office space in a flexible way that meets tenants’ evolving requirements, while reducing time to value.
For example, we’re working with a customer now, who found that the average downtime of their traditional office space was around 12 months. With the ability to provision space immediately, our platform can reduce that downtime to an average of five months and allow them to get tenants in that much quicker. Landlords are going to realize rent faster, and they’ll realize a rent premium — getting seven more months of rent is a huge win for the landlord. Tenants, meanwhile, will be able to get back to work at a quicker clip, more seamlessly and connected to more markets.
Would you say that’s the greatest business advantage to scaling flex spaces for landlords?
This is about retention. The more landlords can provide a flexible product and service offering throughout their portfolio — within the same market, but also in adjacent or global markets — the more tenants will look to them as their sole provider for office space. Occupiers will gravitate to a product they can occupy immediately, that’s turnkey, enterprise-ready, doesn’t require a lot of overhead and provides a consistent, seamless experience across all locations.
And what are some of the benefits that the campus experience offers to tenants?
Interconnecting the spaces across a portfolio opens up a network of places for tenants to offer their employees — accessible and bookable from a single app. It makes it easier for tenants and their employees to access services and find the best location for the work they need to do on a given day.
Ultimately, it’s about creating a consistent and compelling office experience — and tenants are willing to pay premiums for that. We commissioned a report that said 70 percent of tenants are willing to pay 15 to 25 percent of base rent to get services that meet their expectations.
The more landlords can create this campus experience with a secure digital infrastructure throughout their portfolio, the closer they can align to their tenants. It’s about providing for their constantly changing office requirements, and facilitating more choice for their employees and a quicker return to work.
View more articles on the Future Of Flex here.