Last December, Cherre CEO, L.D. Salmanson moderated a session called Executive Outlook: How Are the Nation’s Top CRE Leaders integrating Tech into Their Portfolios and Businesses? at RETCON 2021 in Miami.
The panel included Joanna Zabriskie, President and CEO of BH Management, Jesse Carrillo, Senior Vice President at Hines, and Sondra Wenger, Senior Managing Director at CBRE Global Investors.
Here are some of our key takeaways on what the top leaders in real estate believe has changed after the pandemic and how they predict the industry will continue to change with technology.
Every leader on the panel unanimously agreed that the real estate industry is a “laggard” when it comes to R&D and technological transformation. Organizations are outsourcing to startups in the shape of buying and adopting attractive solutions, hiring consultants to lead technological change, or acquiring tech startups as part of their R&D strategy. Sifting through the ever-growing number of technical offerings and solutions has become a big challenge for firms.
Jesse Carillo’s solution for Hines established a dedicated team under an innovation office that handles the technological strategy for the organization by evaluating new technology and determining if it is fit. This widens the funnel because startups have a better chance of working with a firm like Hines by reaching out to their innovation office that is well-versed in the space rather than Carillo, who isn’t as familiar.
Large companies with a global presence like Hines often discover there is no one solution for all. “We’ve made the determination that since our focus is data, we are ok with having more niche solutions in certain countries, certain pockets, certain asset types, because not all software will work for all asset types,” says Carillo. “This is the biggest lesson I’ve learned in the past two to three years.”
It’s no secret that the pandemic has permanently transformed the office space. Now that employees have had to work from home for nearly a year and a half, forcing them to come back to the office every day is unfeasible. With talent becoming more scarce, companies need to stay competitive for talent, which requires them to focus on employees’ needs when they decide to come into the office or work from home.
Sondra Wenger has noticed that to attract talent, office buildings need to have the ability to create a vibrant community, be environmentally conscious, and have the ability to expand and contract when necessary. According to a user study CBRE conducted in the middle of 2021, food, transportation, and a fitness center, items on the list that used to be a top priority to tenants pre-pandemic, have become the baseline or what is expected. A tech-enabled building focused on wellness has emerged as a new priority.
Joanna Zabriskie with HB Properties says that the Multifamily sector has faced some opportunities and challenges since people started spending more time at home and in their communities. Safe and tech-enabled co-working spaces and a variety of indoor-outdoor fitness and recreational amenities, to name a few.
We like to say that ESG matters. So, how do we decide what programs we need to implement? How much does it cost? What can be measured? A few years ago, more discussed as a concept, ESG has become an area of focus or a requirement from investors, companies, and tenants’ fronts. Despite the cost and its difficulty to measure, many believe we need ESG. Companies take different approaches in measuring water and energy savings and carbon footprint reduction. It is not perfect, yet it is important to continue getting better as society becomes more environmentally conscious.
“We believe in 2030 that buildings are going to become more human. They are going to become more intuitive to users’ needs and what’s allowing us to do that is the data that’s coming through and the ability to predict,” said Sondra Wenger from CBRE. “We no longer have to guess what a tenant wants or what a tenant needs. We can tell from the data that comes through. I would like to see one source for that (data) to make my life easier.”
For Joanna Zabriskie and HB Properties, centralization and data integration are their two “north stars” as of now.
Jesse Carillo with Hines mentioned that it would be interesting to see more robotics, such as moveable furniture and walls. This would allow employees to reconfigure their office to fit current needs, such as a team huddle or individual workspace in a short period of time. An office that transforms would certainly provide flexibility for companies that don’t know how the space will be used on a daily or weekly basis.
Permanent changes are being made in the CRE industry, whether from data or the pandemic. What have leaders in the CRE learned from this experience?
For more, watch the full session here:
As the real estate industry pushes forward into a data-driven future, one thing is clear: those who have true trust in their data and the pipelines that feed their insights will excel in an AI-driven future.
The multifamily real estate sector is on the cusp of a data awakening, and so far the NMHC OPTECH 2024 conference is definitely a catalyst for change.
We are headed to sunny San Diego to meet up with the MRI Software user community for their 2024 Ascend conference.
