As a startup in the real estate space TheGuarantors is always interested in evolving market trends and how we can innovate on our current products to meet the ever-changing needs of our customers. At the recent Columbia Business School and Goodwin Law Real Estate Capital Markets conference, headlined by Stephen Schwartzman, CEO of Blackstone, and Owen Thomas, CEO of Boston Properties, both and attendees and panelists touched on emerging topics and trends that resonated with us as we grow our presence nationally, and across multifamily, office, and other commercial property types.
Going into 2020, demand across all real estate asset classes has been strong - in particular, investors and operators are starting to favor higher quality assets in gateway markets such as New York, Boston, Chicago, San Francisco and Los Angeles versus secondary suburban markets, which had been the case over the past year. At the same time, risk tolerance is higher in the current real estate market, so investors are still willing to target lower quality office assets as they reach for yield.
The NYC office sector continues to show strong fundamentals with good supply and demand dynamics. This asset class has already seen a correction, allowing for more reasonable transaction prices in the last 36 months, and it continues to remain attractive for investors. Driven in part by the rise of coworking, an influx of tech companies to the city, and changing workforce needs, landlords have become more tenant-focused in recent months. Building owners and operators are listening to the newer (and louder?) demands of tenants whether that be spending additional capex on renovating the lobby, adding coffee bars to communal floors, or offering extra conference rooms to combat the backlash to the omnipresent open floor layout.
This increased focus on tenant needs is not limited to the competitive and often unique NYC office market, as landlords across the country are identifying ways in which to meet new client needs throughout the leasing process. TheGuarantors’ Securiti product is a tenant friendly financial instrument that allows companies to free up capital while still providing landlords the same level of protection as a letter of credit. Companies can focus on growing their business while still getting the office space they want as we partner with landlords to accept our product. We work with companies in both primary markets and the growing gateway markets, helping investors and operators attract and retain desirable tenants.