The business of problem solving
For the first time in many years, in 2022 the transaction volume of the last quarter was the lowest of the year, and the Q1 of the year 2023 seems to follow that trend. Where some see problems and hardship, we at Reagle see opportunities. We advise in transactions, value creation, market intelligence and corporate solutions, but when we think about what business we are in, we see this more as a problem-solving business.
And on that front Q4 of 2022 and Q1 of 2023 have been busy. In harder and cloudier times there is not less to do, but more. Even if it’s not as profitable in this market, when “over-achievement” is rare, it is even more valuable. And problem solving is part of Reagle DNA – tough nuts to crack.
Probably there will be more complicated processes in the market and a lot of gaps to bridge (such as the spread between buyers’ price views and sellers’ wants and hopes), but at some point the sun will shine again. Times like this will develop the industry and bring efficiency to the market – and we want to be ready. Thus, we play the long game – we seek the best talent, and plan to continue recruiting when others are fearsome and even scale down.
The challenging market is also an opportunity for us to prove the idea that a cross-border team, where there are no silos but instead cooperation between everyone and the best team for every task and project, will bring the most value for the customer.
I’d like to end on a positive note: The uncertainty increases the demand for strategy and research intelligence about the market. Also, the shift in focus from financial engineering to operative excellence will give active advisors possibilities to prove their value!
The core of our problem-solving method is based on our team of diverse talents and their competences. Therefore, from now on, we want to share their voices here as well in the brand-new section “Point of View”. Keep on reading and dive into their thoughts and insights!
– Alexander Doepel
Let’s keep in touch!
Alexader Doepel
alexander.doepel@reagle.fi
050 305 3409
About the Market
Back to basics
This period will be remembered as the most unfavorable year for the real estate industry since the global financial crisis 2008, in every segment. However, the real estate industry is durable and able to survive. We have done it before. When the market finds stability, those who have been preparing will be the winners.
It is time to get back to basics. There are around 3.7 million real estate and around 6 million buildings in Finland. That is our real estate market. The question is how to find the right investment properties from millions of possibilities. All the characteristics need to tick boxes e.g., location, asset class, building year, size, height, freehold, tenant etc.
Then it gets trickier; the owner needs to be willing to sell and the price needs to be right for seller and buyer.
In Reagle we start from the basics, identifying every building and real estate. Adding data such as transaction prices, tenant financial information and more. Our own database combined with open-source data and data analytics has provided us a unique database and platform of our real estate market.
That´s where the real estate intelligence starts.
The picture below is not a map. It is every building in Finland. How cool is that?!
Want to talk about data and insights?
Olli-Pekka Mustonen
olli-pekka.mustonen@reagle.fi
044 522 26 39
Point of View
ESG newsflash
Year 2023 has started in a widely recognized passive observation-mode for real estate investors. Most owners and investors are looking for signs of stabilization and the parameters of the new normal in the market. As the volume of transactions is still falling behind the previous years, many owners have the potential to re-evaluate their value creation actions for their existing portfolio, for example opex and capex-planning and ESG-topics in general.
Late 2022 and early 2023 we have had the pleasure of meeting many of our customers to talk about ESG and their plans on how to focus on energy efficiency, among other topics. Most owners and investors have already made significant sustainability commitments for the future years. In a wider perspective ESG theme has received criticism about “green washing” etc. In real estate -focus we can also see some buzz in e.g. analytics and new service marketing, but luckily for us in the industry, we can still link many asset level actions directly to the asset value, such as energy efficiency and tenant satisfaction, just to mention a few examples.
Stretching an old saying to fit the occasion, the best time to create positive value with ESG-development was yesterday, but the second-best time is now. Our take from the market is that setting sustainability targets is the relatively easy part. As part of long-term investment planning many owners and investors still look for solid and technically feasible asset-level action plans and long-term support service partnerships to reach targets at a steady year-to-year pace. This is where we come in. In addition to implementing ESG-advisory as a part of our existing business lines, we provide our customers with feasible portfolio- and asset level planning, that enables our customers to reach sustainability targets and value creation. ESG is a wide range of topics from legislation to asset level action. If you feel you require assistance in this sector or need a second opinion, give us a call and let’s have a chat.
Want to hear more about our ESG-solutions?
Ville Posti
ville.posti@reagle.fi
+358 40 182 8044
Are the tenants disturbing your business?
Back to basics
Missing ceiling tiles, hanging cables, leaves on the entrance floor, smelly toilets, lights not working, bits of old and broken office furniture here are there, dark and narrow corridors with loads of small private offices, scuffed walls and stained floors. And of course, all that in 1990’s guise and design with 30 years of wear and tear on top of that.
Anyone who has ever searched for an office premises to lease has seen quite a few of these when attending the viewings. As the only source of income in our industry is the tenant i.e., the customer and the end user of the products we design, build, lease, manage, maintain, sell, buy and – most importantly – use every day, it’s baffling that the customer or tenant experience in our business still too often begins and ends in LinkedIn posts, mission statements and keynote speeches, all filled with industry lingo, platitudes and half empty customer pledges.
Most industries and companies are making significant investments in improving the customer experience and journey all the way from product and service design to marketing, sales and after marketing thus making the buying process more pleasant and easier, and removing all possible obstacles and objections – physical or psychological – that may prevent signing the lease agreement or losing a tenant. There is no reason the real estate industry couldn’t do the same.
If the first point of contact the real estate owner has with the prospective tenant is a broker, i.e. an outsourced resource, whose customer facing activities and communication is mostly outside the owner’s control, one must make sure they’re the best of the bunch, professional, know your premises inside out and are committed to leasing your premises. Make sure that the premises and its every customer touchpoint, i.e. every space or place of the building the prospect visits and sees during the viewing – are presented in an attractive manner, at minimum cleaned and fixed. Ensure that the manager in charge of the leasing process, whether an internal or external asset- or leasing manager, has resources, information, and a mandate to serve the prospects properly and in a timely manner. Lastly, design the leasing process with the prospect in mind, agree and devise the plans, designs, materials, pricing (yes, even that can be done) and responsibilities in advance to enable a smooth, quick (yes, time kills deals, also in commercial leasing) and pleasant leasing experience.
It’s a cliché but I’ll say it anyway: the customer, the tenant, must be in the middle of everything. The money does not come from bricks or mortar, construction manuals or investment memos, it comes from the tenants renting the premises. The leasing market is still vibrant, and the tenants are moving, but on average they’re taking much less space than before, and their requirements are getting higher. Make sure your real estate stays relevant, attractive, and leasable in the increasingly competitive leasing market.
Not that long ago a senior real estate investment executive said that “Oh, this business would be plain sailing if it wasn’t for the tenants disturbing the processes”. If my PC had a face-palm emoji, I’d insert it right here.
PS: To be fair some owners are already paying attention to customer experience and judging by the vacancy rates of their assets and portfolios, clearly quite successfully. You know who you are, and you rock! And for those about to rock, we salute you.
Let’s talk more!
Markus Malamo
markus.malamo@reagle.fi
+358 449 892 887
See our references
Reagle Team
Markus Malamo
“If I have learned anything during the over two decades in business, it is the importance of being present – don’t get me wrong, it does not mean being always available, but that it’s crucial to take the time and genuinely focus on the person you are talking and interacting with. It really does make a difference, and I believe it creates wellbeing and positivity in our work community and clientele.
I’m the senior one in our office, and I’m more than happy to share my experience of the ins and outs of this field of business with my colleagues. I can always bounce ideas and help them out by providing a context to the issue and putting things to perspective.
Before joining Reagle 2,5 years ago, I had already had an extensive career in real estate business, that included various executive positions and roles in different organizations. As a result, I have a 360-degree view on the business – from property technology to sales and leasing, account management and Value Creation. The way I ended up to Reagle was a kind of a coincidence and good timing. At the time I was preparing to take my next professional steps and at that very moment Henri happened to contact me. We were already acquaintances and I immediately gravitated to the way Reagle approached this business – ready to shake up things to put the client and its needs in focus.
I strongly believe in making the client the centre of everything. Especially in Value Creation I feel that it’s truly a must – after all this is a service business at its core. Our aim is not just to be an external consultant, but an extension and almost a part of the client’s organisation. We build up client paths and -experience and back that up with insights and concrete actions based on solid data. It is a true tailor-made service to solve a puzzle of understanding and meeting the needs of the end user, tenant, to maximize the value to the client, the real estate owner. Because ultimately, just like in any type of sales, or buying a home, leasing an office is about emotional experience. And we need to understand and cater for that.”
Team’s greetings
There is still snow on the ground but we don’t let that slow us down!
We are practising for Yritysmarathonviesti – the biggest running event for companies that takes place in 26th May at Töölönlahti.
This friendly event is for supporting after school exercise opportunities for children and has already made possible for 30 000 children to take part in after school clubs. Hope to see you there!
Come say hello and let´s compete for the greater good!
