Canada's Condominium Magazine
Home staging has been a big thing in North America for years now, though it has only recently arrived in France, where it is so new it is still called “le home staging.” The idea, there as here, is to make the place look homey enough that a potential buyer will like it, without looking too much like someone else’s home, a sometimes tricky balancing act. (We can’t help but wonder how necessary it really is in a market like Toronto where multiple offers and bidding wars on some very ordinary properties are the routine.)
Still, home stagers and realtors agree that a well-staged home can command a higher price. They also seem to agree that a basic principle of staging is to simplify, to declutter, to get rid of whatever is superfluous and distracting. Garder de la neutralité, as they now say in Paris. Another rule is to show each space in the home as it was meant to function—the dining room should look like a dining room, the home office should look like a home office. And, it goes without saying, everything should be as clean and fresh as possible, especially in the bathroom and the kitchen. An upturned nose is never a good sign at a home showing.
Office staging ideal for smaller, growing companies
The phenomenon of staging has spread to the commercial real estate sector, where it is also known as “turnkeying.” International real estate services firm CBRE (formerly Coldwell Banker Canada) reports that more and more commercial landlords are doing it, “building out” smaller vacant spaces with meeting rooms, kitchens, reception areas, and a mix of office and open areas so that potential tenants can quickly envision themselves occupying that space. In this way, office staging is similar to home staging. The focus, says CBRE, is on making the office look “welcoming, attractive and functional,” a place where a tenant could move in right away and start doing business. In short, a place where a tenant could feel at home. Typically, it is done for spaces ranging from 1,000 to 5,000 square feet, suitable mainly for start-ups and smaller businesses in growth mode.
According to Dream Office REIT spokesperson Kevin Hardy, who is quoted in the report, office staging results in “a better tour, better lease, and better turnaround.” Built-out suites relieve new tenants of the bother and expense of doing it themselves, and that makes the real estate transaction “as easy as possible.”
CBRE says that built-out office space gives tenants several benefits that an alternative arrangement such as a co-working space cannot. They can locate in traditional office buildings without the cost, risk, and hassle of renovating to suit their needs. They can also take a shorter lease term, which is ideal for companies that are growing fast and may need to move to a larger space in a hurry. In downtown Toronto, built-out space under 10,000 square feet can typically be leased for shorter terms than non–built-out units.
A number of factors are behind the trend. Competition is one. The easier it is for landlords to attract smaller tenants, the more competitive they remain. Size is also a factor. CBRE says that smaller office spaces can be harder to lease, but staging them makes the process faster, especially in markets that have higher vacancy rates. Another consideration is the age of the building. Where an older building cannot necessarily compete with newer construction, office staging lets the landlord offer modern amenities and layouts that are appealing to tenants.
How much does it cost the tenant? According to CBRE office staging units are offered at premium rental rates. Average rental rates on model suites in Toronto are from $4.00 to $10.00 per square foot higher than for large, non-staged units, in a sampling included in the report. As for the landlords, who typically have greater buying power and experience, staging can be done quite cost-effectively.
The future of commercial office staging looks bright, says CBRE. Smart landlords will experiment and use the model to stay current with workplace and tenant trends, creating “win-win” solutions to attract and maintain smaller tenants.