Big, nimble, and smart – how Hines is facing the challenges of change.
As part of our “I’m Flexible” series, Ben Wright, Global Head of Partnerships at the Instant Group chatted with Annie Draper, a Director at Hines, where she leads on flexible office product strategy.
Annie and Ben talked about the changing world of office ownership, productization, how larger tenants are learning from the flex workspace experience, and how to measure ROI.
Here are a few highlights of their conversation. You can also watch the highlights from "I'm Flexible #1 - Annie Draper" video below.
Flex those muscles
As a diverse, global business, Hines sees the office landscape from several perspectives, including real estate, investment development, and property management. Flexibility is key to its continuing success.
For example, The Square is Hines’ fast-growing coworking and flex brand, which sits under its management services umbrella. “It launched in 2017,” says Annie, “when Hines recognized that a lot of our large corporate clients with conventional leases were going elsewhere for shorter agreements.”
Over many iterations, The Square has been highly successful both in its own terms and by benefiting other parts of the business, such as hospitality and the tenant experience.
“Think about conference room management,” explains Annie. “We've got these great amenities and spaces around the world, so how can we make them useful for tenants, not just in the building where they have a lease, but in other locations?”
This is just one example of how Hines is thinking about productization and how to integrate it into property management, development, and acquisition strategies.
Move fast and break (a few) things
Ben suggests that the key may be establishing a startup mentality. Annie agrees, while recognizing the challenge of achieving this in an established company: “We're starting to work out how to prevent perfection being the enemy of getting something out there.
“One of the things we're grappling with is that coworking has set tenants’ expectations of a certain level of hospitality. So, as you move into the world of spec suites, for example, you have to choose the level of hospitality you provide, from a baseline offer to a customized service.
“Overall, we're seeing a shift towards more staff to support the operation of the building. And we’re looking at how we provide that through additional revenue opportunities. Can we monetize event conferencing space? Can we provide additional services to spec suites? It won’t work in every building, but we’re taking conventional property management infrastructure and layering hospitality and service on top. This increasingly includes larger tenants in, say, 20-40,000 square feet, who are saying, ‘Hey, this whole workplace experience thing is a big deal – and we’re not good at it – so is it something you can do?
Experience is the buzz
“We’re getting into workplace experience, which partly comes from a property manager, facilities manager, or building owner. But there’s a layer that really has to come from either additional hospitality or even from the client themselves.
“It’s always going to be a work in progress because things are shifting so quickly, and client expectations are changing. You’re managing amenities, you’re monetizing things, you’re managing the community, you’re creating the individual tenant experience.”
A different look at ROI
Ben and Annie conclude by discussing issues around ROI. They agree that the value of a building now lies in how often people actually show up – and the opportunities to attract other people in. “This brings a vibe, and it brings engagement,” says Annie. “The income you generate may not be huge, but it can pay for additional programming that tenants get to experience. It can pay for extra full-time staff to support meetings and events. It can create a better managed building.”
In other words, this isn’t the conventional property management model. “It’s always been ‘this is my building, and this is my silo,’” says Annie. “We’re thinking about things in a very different way now.”
If like Hines you’re a landlord or owner starting to think outside of the box, get in touch to learn how we can help.
From I'm Flexible #1: Flexible strategies for office.
From I'm Flexible #1: How Hines will deliver workplace experience going forward.
From I'm Flexible #1: How Hines is delivering on multiple flex products.
From I'm Flexible #1: Does investing in flex generate a rent premium for Hines?
