Real estate is also marketing

There was once an investment bank, back in the day, that spent lavishly on its meeting rooms where clients came to visit and were entertained, while letting all the remnant spaces of its office area crumble. Other investment banks took a different approach, but the meeting rooms, no matter the firm’s budgetary decisions or constraints, were sacrosanct. Understandably.

When the industry gave rise to many smaller firms of lesser fame and balance sheets, the practice persisted, even to the point of leasing a shared location that seemed expansive to the untrained eye, although behind the shared facade there was a cubicle and a closet. When the excitement shifted away from Wall Street and to innovative tech, the idea evolved but the principle was constant: Incubators, WeWork locations, and the such, were, among other things, the outward expression of the tenant’s profile and desires, as previously palatial gathering grounds turned playful, glass-walled and gadget-conscious.

For all the issues of efficiency and team culture now under consideration in the centralized vs. decentralized commercial real estate discussion, as the distributed work-from-home routine becomes a universally accepted standard, the referenced aspect of outward presentation remains a theoretic challenge.

Beyond the meeting rooms and glass and all of that, the physical location is a symbol and advertisement. Companies spent fortunes for their logos to be on display at the building entrance, cities that became a magnet for buildings and logo’d entrances had emerged and differentiated on the basis of the tallness of these structures and the logos that moved in.

Banks had opened and maintained branches around town, even as mobile applications reduced the need for that, in large part as a testament to status and to entrench a presence to the customer’s perception, while the logo in the window was a billboard ad for everyone to see.

If physical space, in this way of looking at it, is a marketing expenditure as much as (or arguably now more than) a real estate expense, and if the current trend to reconfigure real estate persists, what will replace the marketing? And, beyond the firm’s offered product – which may or may not sell itself, which may or may not require a physical presence, which may or may not be digitized – how will the deepest pockets outwardly differentiate? How will the smaller pockets pretend to be less small? A bookshelf and some flowers in the video background can be had by anyone.

NY Times – Manhattan Faces a Reckoning