Changing office dynamics are redefining the landlord/commercial tenant relationship.
The days of commercial property owners lording it over their office tenants with a take-it-or-leave approach to leases are long gone. With today’s businesses needing to respond quickly to a more competitive and uncertain trading environment, landlords can no longer get away with behaving like simple rent collectors.
From setting and forgetting a lease for five years or more, the landlord/commercial tenant relationship has morphed into partnering for mutual benefit.
The cost of office space is typically the biggest impost after wages, and what today’s companies most require is flexible work spaces which can accommodate fluctuating staff numbers.
Because the bargaining power between tenant and landlord is more equally balanced than 20 years ago, this demand for adaptable space usage is leading to a more customer-centric relationship.
Commercial landlords are gradually adopting a proactive management style that embeds sustainability and flexibility within tenant relationships. For example, instead of treating leases as transactional, landlords are now invested in acquiring deeper understanding of the rationale underscoring a company’s approach to activity, people and workplace.
In one outstanding illustration of the new landlord-tenant relationship, Dexus has simplified its standard office and industrial lease from 75 pages into a 25-page document by proactively managing issues arising during a lease term, rather than overly relying on legal documents.