REAL ESTATE NEWS

After years of remote and hybrid work transforming how people use offices, commercial real estate leaders are rethinking what a lease should look like. With major employers enforcing return?to?office policies but still seeking flexibility, the question now is how the traditional landlord?tenant model will evolve.

Chase Garbarino, chief executive of HqO, an experiential tenant platform for commercial real estate owners and operators, tells GlobeSt.com that bigger disruptions are on the way. Based on HqO's data and conversations with clients?mostly large corporations?Garbarino sees office usage moving toward a flexible, service?driven model.

HqO's landlord customers represent 500 to 1,000 of the largest asset management groups, typically handling higher?rented, higher?occupancy buildings. Across roughly 10,000 properties ranging from B+ class to trophy, Garbarino says the trend is unmistakable. Companies want flexibility, not long?term leases.

Citing the Wall Street Journal's report on companies such as Pfizer, Amazon.com, JPMorgan Chase, Lyft, and Anthropic turning to flex space, Garbarino says this segment could "eat up" the lower end of the market. "Why take a long?term lease on down?market space," he asks, "when you can hedge your risk by going with a nicer offering, bundled services with flex, and go month?to?month or quarter?to?quarter rather than a five?, seven?, or ten?year lease? I don't think there's much of a future in that from all the data we see."

He compares the shift to what happened in other industries. "If you look at everything from video rental, taxi services, retail, hospitality?they all went through kind of this experiential shift," Garbarino says. "Smart landlords are balancing long?term commitment with flexibility? retaining tenants over time, but recognizing that flexible and dynamic work isn't going away."

The next phase, he suggests, will resemble consumer platforms. Companies will choose landlords the same way people choose hotels or retailers?based on experience, convenience, and network reach. Yet few owners have that scale today. To meet tenant expectations, Garbarino says landlords may need to join broader networks that connect occupiers with available spaces across cities or countries, operating like an "office equivalent of an Uber or Airbnb."

HqO already sees this transition taking shape. "A lot of traditional landlords are starting to offer memberships in their leases so that people can go to different buildings," Garbarino explains. "We have over $50 million of tenant credits that are being bundled in leases. You can spend credits, like airline or hospitality points, at amenity centers, conference spaces, or food and beverage areas."

To Garbarino, these innovations aren't just perks?they're the new foundation of office leasing, one defined by choice, experience, and adaptability rather than square footage alone.

Source: GlobeSt/ALM