Reliably assessing corporate space needs has been complicated until now. The Test Fit service simplifies the process in a revolutionary way, helping tenants and landlords navigate uncertainty.
A storm may be brewing
Economists warn that the commercial real estate (CRE) market is becoming increasingly uncertain. As we know by now, most office workers refused to return to the pre-pandemic format of in-office work.
Countless organizations have embraced hybrid work schedules, and many employees still work remotely. Both employment formats require less space than the traditional office. Prominent companies have recruited employees and tried to expand their workspace. However, worsening economic conditions in key markets have caused widespread layoffs.
As a result, office occupancy levels have remained unusually low since the 2020 lockdowns. One after another, companies have discovered they do not need as much space as expected, and this drop in demand has worrisome consequences.
According to a pessimistic forecast published by Cushman & Wakefield, vacant commercial real estate in the US is expected to reach 1.1 billion square feet within seven years. By 2030 hybrid employment will render 330 million square feet of offices redundant in the US alone.
Additionally, billions of dollars’ worth of obsolete property will disappear from the US and European markets due to stricter energy efficiency standards.
These processes are bound to change our cities dramatically. Municipalities such as New York City, San Francisco, and Seattle are concerned that the weakening CRE market could hurt tax revenue. Moreover, restaurants, hotels, and other businesses suffer considerable losses because fewer commuters come to the business districts. Creative solutions are needed to adapt to this new reality.
An old challenge in a new complex reality
Commercial real estate is a high-stakes market. Before renting a facility, one of the most critical steps is correctly assessing the client’s space needs. The catch is that assessing space needs requires effort, time, and money.
Identifying the most suitable property requires professional knowledge and rich experience. The larger the requested area and the more complex its structure, the greater the difficulty.
However, making a mistake can be costly: a property that does not fit the nature of the tenant’s commercial activity may become an expensive and wasteful burden for many years.
If the rented property turns out to be inappropriate, all this effort might be wasted.
Such evaluations always were challenging, but now relying on guesswork has become even riskier. The players in this market need agile and accurate tools more than ever before.
To answer this need, we offer Test Fit – a professional service that accurately determines the tenant’s real-estate needs before a contract is signed.
Test Fit lets tenants and commercial real estate agents know whether a specific property fits their needs.
The evaluation is performed according to the tenant’s detailed profile. The client is asked to specify their requirements, including how many employees will work in the offices, how many separate offices and conference rooms are needed, which equipment rooms are necessary, and so on.
Based on these requirements, we calculate the net space the client needs and the gross area according to which the rent will be calculated (the net area constitutes 50 to 70 percent of the gross area, depending on the floor plan).
Furthermore, the obtained standard specifies how much space employees in different roles need. Now, one can readily understand whether a particular property suits the company.
How does Test Fit help you?
Test Fit is designed to help tenants and CRE experts, creating a win-win situation. Here are several ways in which agents benefit from Test Fit:
· Accurate Marketing:
Test Fit helps CRE agents market properties accurately. Knowing precisely what the prospective tenant needs, they can offer the client only relevant assets. Agents and facility managers can act confidently and stop guessing.
· Building Credibility:
Test Fit’s accuracy helps CRE agents build their credibility. First, relying on an objective assessment lets them negotiate transparently with the client. Second, thanks to Test Fit, the CRE agent can offer the tenant the most suitable properties, which are not necessarily the largest (and most expensive) available. This way, the agent helps the tenant reduce expenses, establishing mutual trust and a good reputation.
· Enhanced competitiveness:
With Test Fit, locating relevant properties is quick and effortless. This agility is critical to gaining an edge over the competition. Therefore, Test Fit is an essential marketing tool in an ever-changing real estate market.
Test Fit supports the tenants’ decision-making, as well. Here are several ways it can serve them:
· A basis for calculated planning:
Test Fit helps tenants set a data-driven policy regarding their properties. Tenants no longer need to risk signing an expensive binding lease without knowing whether the building can satisfy their requirements. Guesswork becomes a thing of the past.
· An objective evaluation of the existing property:
Tenants can use Test Fit to check their existing rented property. Thus, identifying how much additional space is needed or how much space is underutilized could not be more straightforward.
· A tool for resource-saving:
Whether a company wants to expand or downsize its office space, it must have a clear picture of the situation. A Test Fit assessment can provide a reliable starting point for any such move, thus helping to avoid unnecessary expenses.
Ultimately, finding the optimal property can be simple. Our innovative service can support you in this process.