Occupier.com’s Matt Giffune: Decentralized Offices, Coworking Here to Stay

The company seeks to streamline the process of renting out multiple spaces

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It’s all about knowing what you lease and when you leased it.

And also how much it’s going to cost you this month, and next month and the month after that. And where these places are and when the lease is going to run out.           

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At Occupier.com, the Lower Manhattan-based company is all about having that information on your phone or your laptop, or whatever computer screen you wish. It is one of several companies that is working to streamline the process of renting multiple locations, and presenting all the information on an easy-to-understand set of screens. The company serves a diversity of commercial markets: office, retail, industrial, health care and biotech. 

Matt Giffune, a co-founder of four-year-old Occupier, talked late last month to Commercial Observer about the often arcane world of automated lease administration, and taking the burden off companies to track all of their space. Pricing is based on the size of a company’s portfolio, with a per-lease charge calculated as an annual subscription.

His remarks have been edited for brevity and clarity.

There are a number of companies, including JLL, one of the world’s biggest real estate services firms, that offer lease administration. What makes your company different?

There are a bunch of legacy companies in this market. The first-generation lease administration platform was developed over the `90s and the early 2000s, and hasn’t really caught up with people working in a modern framework, so what you get is very clunky, and it takes a long time for the customer to realize value, and they’re rather expensive to implement. We’re different in that our face really feels like a consumer app, so if you’re used to logging in on LinkedIn or your bank account or Facebook, it’s going to have that same look and feel.

We have the ability to have our customers [have their leasing information at their fingertips] in two to four weeks, depending on the size of their portfolio. The customer is realizing value from our platform maybe in a month or two. 

And anybody that requires access to real estate information can get it. We take any stakeholder within the business or outside the business, such as a tenant rep broker or lease accounting consultants. It’s a much more open, user-friendly, easy-to-deploy system.

What part of the market are you aiming for? You are doing office leases, and also retail. I saw Shake Shack and Bluestone Lane on your website.

There are certainly differences between leases, whether you are leasing a restaurant space or a retail space or an office space; or if you are leasing lab space for biotech, or health care space for a hospital. There are always going to be nuances in those leases, across asset types. But what doesn’t really change is the nature of the information within those and how important it is to track it, and using that information to make better real estate decisions and outcomes.

For example, a rent schedule in a retail lease might be based on a percentage of sales. We can handle that, based on our retail functionality, so a retailer can understand their sales figures, and work out their rental rates and negotiate leases in that framework.

Leases are generally defined by a financial component: the rent check and your variable costs; and your legal clauses, which are important to track because they sometimes contain dates. You might be beholden to your landlord in a precarious position, or you might miss out on an opportunity. We’re able to handle rent structures and lease structures across a multitude of asset types.

Our customer base is roughly split 50-50 between office occupiers and non-office occupiers. 

Our primary goal is to provide all those businesses with one central place to manage their leases. Our customer base tends to be younger companies, fast-growing companies, businesses that don’t have the luxury to work out of a spreadsheet, or they haven’t had the painful legacy of implementing one of these old school systems.

Is there a basic difference between an office customer and a retail customer, particularly a consumer-facing retail customer like a restaurant chain? In the office market, maybe the pandemic has changed that, but companies that want to go national want to be in certain cities, and one office is sufficient.

We ran an analysis recently that showed that over 2021, all of our office users actually increased their location count by 38 percent. What that tells us is the effect of the pandemic is it actually caused office occupiers to open more locations because people are expecting to be able to work closer to their homes, and also, from a hiring perspective, office occupiers can now be wherever they want. It’s been proven that people can work from home or work remotely. Now it’s much more a hub-and-spoke model, where  the location count for office is going to start increasing.

On the retail side, it’s all about meeting customer demand. The main function of real estate is to support the growth of that business. You look at Shake Shack, for example. They’re on an aggressive growth curve. They want to be able to reach their customers — different lease types, different formats, different landlord relationships — but, at the end of the day, the real estate is expected to meet that customer demand.

I talked to a guy who helps retail chains grow, and he said that 2021 would be the year of the franchise, particularly chain restaurants. I’m wondering if you are seeing aggressive growth in that area?

I would have to agree with him. We’re seeing a ton of demand for those products and quick-service restaurant concepts, whether they are franchises or corporate-owned stores. They start in one geography and gain a foothold, and grow into other markets. I would have to agree that the chain restaurant concept is growing. We’re seeing a lot of activity on our platform — just growing like crazy.

Each is also tied into the concept of quick-service delivery. We recently started working with a company called Gorillas, which is a German on-time delivery service company. You can order your groceries and they will be at your door in 10 minutes. There is a huge opportunity for retailers who want to set up shop on a micro, local basis, and I think that technology is also accelerating that change. It used to be that you had to drive to McDonald’s to get your Happy Meal, but now you can just order it on an app, and you can have it delivered to your house, or you can order it on an app, and you can show up at the store and it’s right there.

Instant delivery that people are starting to get used to is actually going to drive even more retail locations, because retailers and restaurants are going to need to be close to the consumer.

And that is another effect of the pandemic. People are stuck in their homes and they order takeout more.

What role, if any, do you guys play in terms of the franchising process?

We have several franchising companies as clients. We give that business, which owns franchise rights in certain territories, the ability to consolidate all their different brands, their real estate, into one place. So if I am the franchise owner of New England-area Wendy’s, I might also have the franchise rights to an emerging concept. I can have a portfolio of different brands. My business is to make sure those locations are profitable, and I can centralize that in one place.

We don’t necessarily provide a relationship between the corporation and the franchise holder. We go directly to the management company.

From the customer’s point of view, they can’t tell an owned and operated location from a franchise restaurant because they all look the same. Do you oversee that process?

Not really. We don’t have a product that does quality control management across different operators for the corporate entities. We’re much more boots-on-the-ground real estate workflows and management for the actual franchisees themselves. They typically have to adhere to brand standards and adhere to certain criteria for site selection. Once they’re off and running their own locations, it’s up to them to manage that relationship. We don’t get involved in the relationship between the franchisee and franchisor.

You mentioned hub-and-spoke earlier. To what extent are you seeing companies creating satellite offices as we move from COVID to post-COVID?

We’re seeing it happen more and more. We have office occupier companies that increasingly have us on-board coworking leases, which are usually shorter-term leases, that are spread more widely geographically. Speaking from our experience as a company, we’re a remote-first company. We have 25 employees and we’re spread all over the country, and in Latin America. So, when somebody needs an office, we’re able to provide that.

That just adds another lease to our portfolio. We are seeing a more decentralized approach to real estate portfolios, especially on our office-occupier side.

And do you attribute that to the effect of the pandemic?

Almost exclusively. It’s not anything revolutionary or new. People have been experimenting with different workplace strategies for years. There’s the whole hot-desk gaming; and the hoteling; and all these other concepts that get continuously cycled through to commercial real estate.

What COVID did was force everybody to have to reckon with a new paradigm. Once people got used to it, then, all of a sudden, it became apparent, and you could start recruiting people from areas where you traditionally didn’t look, because you didn’t have an office there. Employees themselves were able to have a better work-life balance. Or at least tailor their work style more towards their lifestyle.

This interview was originally published in Commercial Observer’s Tenant Talk newsletter. Please consider subscribing to it and other newsletters.