With 65% of the world’s population moving into urban areas over the next few decades, real estate owners have an unprecedented opportunity to unlock new streams of revenue while also helping to shape the fabric of our cities. To explore what this population shift to cities means for real estate owners, Honest Buildings and Convene gathered 150 of commercial real estate’s top owners in New York City for an intimate conference focused on how to progress the urban landscape.
Kicking off the day with a headlining keynote from Lisa Gansky, entrepreneur, investor, instigator, and the author of the bestselling book, The Mesh: Why the Future of Business Is Sharing. Gansky, a pioneer in creating value through sharing and collaboration, spoke in-depth about how she sees cities as platforms for our collective future. Gansky explained how cities are actually a dialogue between citizens, businesses, and governments, and shared how today, when more people than ever are connected, there is incredible power at the intersection of technology, sharing, and civic innovation. Owners sit at the forefront of this shift and through collaboration and making the most of what Gansky refers to as “the network effect,” can play an incredible role in creating local and global resilience.
Lisa Gansky, entrepreneur, investor, instigator, and author, begins the day with her keynote presentation.
A full day of programming continued, with a mix of keynotes and high-level panel discussions with owners, technologists and investors, including Ric Clark, Michael Turner, Robert Entin, Sandy Jacolow, Dennis Main, Jennifer Michaels, Clint Osteen, Sara Queen, among others. The theme of the day was to explore how advances in technology play a role in the future of urban development and capital deployment, and to break down which innovations, building enhancements and process improvements are worth investing in.
In the words of Silverstein Properties CIO, Sandy Jacolow, “At the end of the day, it’s going to be all about the data.”
Above all else, access to data -- and how that data is leveraged -- is changing the way business gets done. Here are the key takeaways from the day’s event:
THE FUTURE OF CAPITAL DEPLOYMENT & URBAN PROGRESS
A keynote from Honest Buildings CEO, Riggs Kubiak, argued proptech should put the power back into the hands of owners to make more informed decisions. Revealing new data, Kubiak showed how one owner harnessed the power of data to improve the process, the speed and the quality of how buildings get built, repositioned, renovated, and maintained -- imagine the impact on our cities with widespread adoption!
INSIDE THE REAL ESTATE COMPANY OF THE FUTURE
With the increasing adoption of real estate technology, a new group of professionals have the chance to add value to their companies' portfolios. Leading technologists predict the three roles/teams that will become the most prevalent within the real estate organizations include: data scientists, programmers and the applications team, and cyber security to protect all the data and systems.
WHAT IS THE ROLE OF AI, MACHINE LEARNING & BLOCKCHAIN?
AI and blockchain are buzzwords that everyone hears on a daily basis. According to Robert Entin, Executive Vice President, CIO of Vornado, “AI has already started creeping in, but Blockchain is to the internet what the internet was to nothing in 1999. But once it hits it will be fast. A transactional layer on top of the internet will fundamentally change the way everything is done.”
Chris Zlocki, Head of Innovation at Colliers International, sees technology moving from providing data to predictive analytics. “With the evolution of blockchain, what’s interesting is the amount of information that’s going to be free and public, about occupancy, cost and ownership.” He added that with a layer of AI and machine learning, the process will go from Alexa telling you the temperature to telling you to buy property in Singapore or New York because the market has shifted.
Panelists discuss the future of workplace and development decisions. From left to right: Chris Zlocki of Colliers International; Tim Dumatrait of WeWork;
Kent Tarrach of Brookfield Properties; Phil Storch of Washington REIT; Melissa March of Plastarc and Savills Studley; and Richard Tyson of Gensler.
WHAT ARE LANDLORDS BETTING WILL CHANGE THE INDUSTRY IN THE NEXT 5 YEARS?
Spending money on technology, making the best use of data, creating efficient buildings, and keeping in step with industry disruptors like WeWork and Airbnb are major issues for even the most deep-pocketed real estate companies around the world.
For Brookfield Property Group Senior Managing Partner and Chairman, Ric Clark, the way that technology is changing the real estate industry is coming in waves. First was the “digitization” of the industry, which produced offerings like Zillow and CoStar. Next came industry “disruptors” like Airbnb and WeWork. The coming phase will be focused on improving experiences and productivity in buildings. “Tenants are partnering with landlords so they can solve their people goals.”
Oxford President Michael Turner points to growth in opaque models in hospitality like Airbnb as a guide for the next 5 years. Those that can act on new consumer expectations will win.
Another big trend: collaboration.
“We are better off teaming up with others in the industry, finding the right operators and maybe doing management deals with them,” Clark said. “We are more likely to do that than build from scratch.”
Turner agreed that, when it comes to technology and new products, teaming up with another company is the way to go. “Historically, we did things out of necessity,” he said. “I think today, partnership and investing is a way more efficient use than [building] it on our own. That could be an enormous distraction, and we end up with something that is not world class.”
THE EVOLUTION OF REAL ESTATE FROM COMMODITY TO EXPERIENCE
A keynote by Convene’s President and Co-founder, Chris Kelly, focused on how landlords, managers, and service providers are integrating human-centered concepts into spaces to improve the quality of tenants’ lives. Arguing commercial real estate has gone from B2B to B2B2C, Kelly said the expectation for the workplace has changed. Commercial real estate has transitioned from focusing on what will appeal to the executive to what will appeal to the coveted talent; evolving real estate from serving as a commodity to an experience. Stressing real estate hasn’t seen a transformative change since the elevator, Kelly instructed the audience to get ahead in the evolving world by betting on change, embracing the future, and keeping tabs on trend lines, not headlines.
Chris Kelly, President & Co-founder at Convene; Riggs Kubiak, CEO & Co-founder at Honest Buildings; Nick Romito, Founder & CEO at VTS
BUILDING DATA TO BECOME PREDICTIVE TO INCREASE REVENUE
“What’s so exciting is this is all about to emerge. It’s like electricity in this industry. This is going to be transformational,” said Chris Zlocki, Colliers International’s Head of Innovation.
The amount of information about buildings and their tenants is enormous. Building owners, operators and tenants are still learning how to manage and leverage that data to improve environments to ultimately increase revenue. Office real estate is evolving constantly -- both the space in which employees work and the actual work that is done.
DATA PRIVACY MAY BE LANDLORDS’ NEXT BIG CHALLENGE
Gathering data about tenant and employee behavior can be used to make buildings more energy efficient, but as real estate companies push forward in the technological age, the ethical and privacy challenges around gathering data will follow.
Mall landlords are tracking customers to figure out how to better design buildings and to advertise more effectively. Earlier this month, workspace provider Convene acquired Beco, a company that tracks workplace activity and then compiles the data and analyzes it. The investment, Convene said, will help the firm create better, more efficient workplaces.
At the end of the day, when the product makes your experience better, when it makes your building better, then the tenant or the individual will be willing to pay that price. So the next step is just a matter of having a lot more understanding across the industry of what those implications are.