Thread by @antonyslumbers

CBRE gives up on Hana and folds it into an investment in Industrious. Meaning? Start with 👇

In my #SpaceAsAService presentation this is the first of 8 factors determining success. Based on the joke about the difference between the chicken & pig in a bacon & egg sandwich. The chicken is involved but the pig is committed.

Neither is wrong but to succeed in #SpaceAsAService you need to be fully committed. It’s simply too hard to just be involved. If it’s not central to your core business then doing it yourself is a mistake.

For a brokerage like CBRE it was never going to be core. So they could throw money at it, but without a real defining commitment to the value proposition was it ever going to succeed?

Their core business needs to have ‘skin in the game’ of the flex market (if only so they understand the dynamics) but most likely doing so via the excellent Industrious is a much better option.

Where that leaves other real estate services companies is interesting. Has the Hana experience 100% invalidated doing it themselves? Probably. So what should they do?

Last year I criticised another firm partnering with an operator. On the basis that they should be buying at least a decent stake instead. Because if they execute well the inevitability of taking a stake will follow, but the price be much higher....

CBRE have, I think, validated that argument. So expect you know who to buy a stake in you also know who, soon. Maybe pandemic has been a short term blessing but by next year, they’ll be coughing up.

It gets more interesting for landlords. The pandemic is a near term bug for the flex industry but a massive feature long term, as demand will massively increase. So every landlord, even every major multi let building, will need to offer flex options.

To date some landlords are building their own offerings. But are these efforts even nearly enough? Chicken or Pig? I think the former. Little ‘skin in the game’ even vis a vis demand pre pandemic. Not nearly enough for post pandemic demand.

So. What to do now? Current plans are too little. Is internal commitment as well? This stuff is becoming core, or at least critical. So ‘Pig’ behaviour is needed. Are they up for that? CBRE said they were with Hana. But they weren’t. Is that an inevitability given mkt structure?

It’s make your mind up time. Landlords need to 10X commitment to doing flex themselves, or immediately back out and start Plan B. Which is to pick a range of flex partners (to service different audiences), align incentives, and buy in enough to maintain alignment.

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