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Ex-Deutsche Bank Fix-It Expert Conjures the Office of the Future

Ex-Deutsche Bank Fix-It Expert Conjures the Office of the Future

Enrico Sanna is doing all he can to protect tenants in his London office buildings from Covid-19. He’s installed hands-free sinks and thermal imaging cameras in the lobbies, and every visitor gets a cloth mask.

Yet he knows soap and social distancing won’t be enough as companies increasingly question their need for offices, and leasing deals crater.

That’s why Sanna and his team at Fora Space Ltd. are brainstorming ways to transform offices into multimedia hubs that deliver more than a desk, a phone and a supply of face coverings. One idea: using hologram technology so those working from home can beam three-dimensionally into meetings.

Ex-Deutsche Bank Fix-It Expert Conjures the Office of the Future

“I have to do more than sell my clients square feet,” says Sanna, 47, a one-time investment banker at Deutsche Bank AG. “The office has to support collaboration and serendipity between colleagues. So what’s a more immersive way of meeting with people working from home? This is just one of the things we’re thinking about.”

The pandemic sideswiped Fora in the midst of a major expansion. The four-year-old company opened nine locations in 2018 and 2019, and in 2022, the firm plans to complete construction of a building in London’s tech hub, Shoreditch, with 100,000 square feet of space. Late last year, Fora refinanced with a 280 million-pound loan ($353 million) secured by its properties from a fund managed by Nuveen LLC.

No matter what steps Sanna takes, it may be tough for Fora to find and keep tenants. Financial firms were already reducing their footprint before the pandemic walloped London’s market.

Ex-Deutsche Bank Fix-It Expert Conjures the Office of the Future

U.K. commercial-property investment sank to a record low in the second quarter, according to Lambert Smith Hampton Ltd. a London-based brokerage. Demand for core office space could fall more than 25% this year. In recent months, WeWork, the global co-working giant that cratered last year, has tried to renegotiate some of its own leases and in a small number of cases has withheld rent from landlords.

“A lot of smaller tenants are going to struggle,” says James Carswell, a real estate analyst at Peel Hunt LLP, a London investment bank. “If you need to save money, the easy thing to do is hand back the keys, and re-filling empty space is going to be tough.”

Doing that isn’t just a real estate question. Cities are struggling to revive economies devastated by the spring lockdowns and the threat of future closures.

It could open a new chapter in the constant evolution of urban landscapes. In just the past few decades, London’s disused wharves morphed from vestiges of empire into a global banking hub. In Brooklyn, chic lofts replaced moribund factories. Now office towers face wholesale re-imagination -- one more radical than the open floorplan.

Corporate Culture

“The future of work may be up in the air,” says Octavius Black, the CEO of Mind Gym Plc, a consulting firm on workplace behavior. “But one thing is certain -- you can’t build a corporate culture on Zoom.”

Sanna, whose tenants include Sony Corp., is betting that comfort and style are a key part of the answer. Fora is a so-called flexible space provider that leases private offices, co-working spaces and even just desks on terms that can range from month-to-month and then be tailored to each client. It tricks out its spaces with amenities you’d find in a boutique hotel. Fora’s Soho location features a gym, a roof terrace, and a lounge with a turntable for spinning vinyl records. The WeWork-meets-Soho House vibe appeals to firms such as DropBox Inc., which took a whole floor in the building.

Unlike WeWork, Fora owns eight of the 12 buildings it operates, which means it doesn’t have to fund long-term leases with revenue from short-term tenants. As tough as the market looks now, the type of space Fora provides is expected to soar to 30% of global square footage by 2030, according to a July report by Jones Lang LaSalle Inc., a property broker. With London at just 6%, that’s a lot of potential upside.

Ex-Deutsche Bank Fix-It Expert Conjures the Office of the Future

Vegas

In the Italian-born Sanna, Fora has a banking veteran steeped in the hard lessons of fiscal distress. From 2012 to 2016, he managed Deutsche Bank AG’s portfolio of non-core operating assets. Sanna found himself the chairman of The Cosmopolitan, a half-built luxury hotel in Las Vegas the bank had foreclosed on in 2008. Overseeing the completion of a place with a three-story-high chandelier and digital art installations, Sanna was smitten. Deutsche Bank sold the place to Blackstone Group Inc. in 2014, and two years later Sanna quit with an eye toward starting a firm that would manage office space like a hotel.

As it happened, two of Sanna’s old friends from the MIT Sloan School of Management had the same idea. David Marks and Jason Blank had formed Brockton Capital LLP in 2005 and raised 1.45 billion pounds in three funds that invested in commercial property and operating enterprises such as Camden Lock Market, which turned a London tourist destination into an open-air food and crafts bazaar. They believed the WeWork model was a game changer, but they wanted to go upscale.

Brockton invested 300 million pounds in equity in Fora and brought Sanna together with co-founder Katrina Larkin, an entrepreneur who’d managed Camden Lock Market and was named Fora’s head of experience. From the outset, they sought to make their places happening scenes. Last year, cast members from the hit BBC show Peaky Blinders dropped by Fora’s Soho building to record a podcast in its studios, which are available to all tenants.

All the buzz has evaporated. Now Sanna is girding for the task ahead.

“I need to convince you to come back to the office now,” he says.

©2020 Bloomberg L.P.