High-Performance Leasing in a VUCA Environment

February 7, 2023 • As we move through the first quarter of 2023, the commercial real estate industry continues to be buffeted by the headwinds of a volatile, uncertain, complex, and ambiguous (VUCA) environment. In this post, we will share our strategies for achieving high-performance commercial leasing results notwithstanding these challenges.

The Black Box 2.0 Solution

Prior to Covid, the legal leasing process was complicated, but like manufacturing a car, could be distilled down to a series of sequences and steps that would ensure success time after time. But for many real estate professionals, the legal leasing process was a little-examined journey that took place in a black box. So we opened up that black box in our Black Box posts and shared our blueprint for success.

The participants in the Black Box: landlord, tenant, attorneys, and brokers, move along two intersecting axes of conflict as they transform the raw ingredients: letter of intent and form lease, into a signed lease. On one axis, the urgency mandate conflicts with the need for precision insurance and on the other, it’s a tug-of-war between the need for compromise and the urge to get it all. Throughout the journey, personalities, company histories, hidden agendas, property characteristics, and unexpected curve balls need to be deftly handled to get beyond the red zone and over the finish line.

But once Covid hit, we found ourselves in a VUCA environment where rapid and unpredictable change became the norm and the rules of engagement changed. Suddenly, what was an already complicated process, became a complexprocess that requires more than a formulaic approach. So we devised an enhanced set of guidelines: our VUCA-proofed Black Box 2.0 Solution, to improve the odds that notwithstanding the headwinds, your legal leasing process will consistently deliver high-performance results.

Guidelines for VUCA-Proofed Results

The Black Box 2.0 Solution can only be achieved if time-worn, inflexible, long-term perspectives are discarded in exchange for a flexible, innovative approach.

To help your leasing team overcome the tendency to cling to what’s always been done and embrace change, consider the following:

Modernize Your Tools and Approach

This two-step process is the key to implementing the Black Box 2.0 Solution. First, you need to ditch your dinosaur form lease that includes every landlord/tenant issue your company has ever faced and create a 21st-century lease that is streamlined, more even-handed, and less punitive. Second, you need to refrain from ever responding to an open issue with “we never agree to this” and instead thoughtfully consider the other party’s request.

Adapt

Once your team has taken steps to modernize, the next stage of the Black Box 2.0 Solution is embracing rapid, unpredictable change as a constant companion. This means developing an institutional ability to accommodate the unexpected, time after time, whether it’s a micro change that only affects the premises or parties to the transaction or a macro change such as increasing interest rates or market fluctuations.

Plan, Coach & Pivot

To truly perfect the art of the Black Box 2.0 Solution, the members of your team will need to become elite athletes of change that can respond in real-time to new issues and realities with confidence and certainty. To achieve this consistently, everyone in the Black Box must at all times be focused and in action. Constant communication and good working relationships, both internally and with the other side, are essential. And remember, speed is critical: time kills deals — especially now.

Improving Your Odds of Success

Is your leasing process ready to withstand the challenges of today’s VUCA environment? Call us today to make sure. You can’t afford not to.