#WorkBold Podcast Season 3 Episode 2

Why is CBRE Forward cofounder ALL IN on Space-as-a-Service?

Commercial real estate needs to evolve in order to stay relevant

Caleb_Parker.David_Cairns

David Cairnes, Senior Vice President - Office Leasing for CBRE in Toronto, Canada, joins Bold Founder Caleb Parker to challenge commercial real estate to bet on Space-as-a-Service.

He says it doesn’t matter what the capital markets or landlord community wants, customers want flexibility and service, so if you’re in commercial real estate you need to evolve in order to stay relevant.

He believes "Space-as-a-Service should be part of every office landlord’s leasing and retention strategy".

In this episode you’re going to learn the difference between flex and Space-as-a-Service, some details about 3-way deals transacting between landlords, customers and operators, and how asset owners can make their buildings more attractive for high quality occupier customers.

Finally, Dave helps us understand how it makes sense for Space-as-a-Service to become less risky for landlords, yet still save customers money.

Connect with Dave on LinkedIn

Connect with Caleb on LinkedIn

If you have any questions or feedback on this episode, email podcast@workbold.co

Value bombs 

  • The landlord community isn’t providing enough Space-as-a-Service to meet customer demand
  • Enterprise technology customers are starting to partner with flexspace operators, and are approaching landlords in tandem to transact deals
  • This type of deal enables the customer to take the long lease required by the landlord, but offset the cost liability of having too much space before they grow into it
  • These enterprise technology companies are comfortable managing risk in this way, whereas the landlord isn’t
  • Landlords need to embrace these deals and make it easier to facilitate provisions for this in the terms of a lease
  • But this should be a leading indicator for the landlord community as to what customers want. Not all companies can do deals like this, but many want these same benefits
  • Landlords need to partner directly with Space-as-a-Service operators to solve problems for occupiers
  • Otherwise, the customer ends up in unfavourable sublease terms
  • Landlord-operator partnerships are more sustainable relationships that create stable pricing models for the customer
  • The agent community has a lot to gain by brokering more Space-as-a-Service partnerships between landlords and operators
  • There is a difference between flex and Space-as-a-Service; flex is a feature of SPaaS
  • Space-as-a-Service should be part of the leasing and retention strategy at the outset for new developments
  • Bringing in a high caliber operator makes a building more attractive for high quality occupiers
  • Regardless of what the capital markets or landlords want, customers want flexibility and service, so commercial real estate needs to evolve in order to stay relevant
  • Landlords needs to think about service and hospitality holistically
  • Amenities should be revenue drivers, not line items in the service charge

About David Cairnes

Dave started his career out of university as a professional poker player. He was ranked in the top 100 online tournament players in the world for a time. In 2012, Dave transitioned from poker to commercial real estate, becoming an office leasing broker in downtown Toronto, Canada. Dave rose quickly through the ranks and is now one of the top office brokers in Canada, where he’s focused on high growth companies, Space-as-a-Service operators and landlord representation. The analytical & interpersonal skills he honed as a poker player helped him become an excellent negotiator regardless of which side of the deal he is on. Dave is also an avid "futurist" when it comes to the office market and can be found on LinkedIn talking about the importance of delivering space as a service going forward.

And because he’s a “futureist” he cofounded CBRE Forward where he showcases the success stories of Canada's most innovative companies, providing tailored real estate insights to high growth companies, and interviewing authorities on the future of work (#MovingForward).

 

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