You Spend 40% of Your Life in a Commercial Building

This year’s CRETech NYC was chock-full of interesting trends and highlights.  We’ve listed our favorite moments below. What was yours?

Mark Grinis, this year’s keynote speaker, posited that 40% of a person’s life is spent inside a commercial real estate structure (office, retail, mixed use). If we looked at awake time, it’d probably be even more, but we can’t guarantee you wont fall asleep in that 3PM meeting. Meanwhile, other experts discussed the rise in a need for flexibility among office space tenants. Here are some other takeaways from CRETech NYC:

• CRE should use data smartly to provide good choices for tenants. → Conner McGill, Enertiv Co-founder

• AI in CRE has been accelerating in recent years due to deep learning and natural language processing advancements.

• Although using humans are necessary parts of the data collection puzzle, nonhuman sources are often better (automation, machine intelligence, etc) because they are more accurate and a lot more data points can be collected.

• Data and transparency are becoming integral to all aspects of real estate. →  Ben Liao, Managing Director Colliers.

• Landlords now care more about utilization rate than occupancy rate because the workforce is looking at more than space when deciding on rents.  → Yishai Lerner and Mihir Shah, JLL Spark Co-CEOs.

With billions being invested in new technology focused on real estate, especially in multifamily, it is surprising no one has asked the customer to describe the pain points which need to be solved. We heard from Karn Hollinger, SVP, Corporate Initiatives, AvalonBay,  using a rapid-fire, humorous approach to the business problems that they wish venture capital investment would target.

Some Areas Decline While Other Explode

Trends are industry-agnostic; they come and go. For CRE, it was a surprise to hear that certain areas, like the demand for cars and brick and mortar retail shopping values have declined. Here are some other noteworthy points we heard:

• • Nonstore Retail Growth is Exploding

  • Foreign Students Remaining in the US after Graduation is Increasing

  • … And ...Renters Are Aging

  • Producer Price Index for MF Construction

  • Noise Levels in Urban Areas Are Increasing

  • … And...Working from Home is Increasing

The above points, naturally, are leading to new demands from CRE spaces. We're sure you can guess what some of those demands may be, but here are some points that particularly stood out to us:

• • Adaptive uses for parking space

  • Good Retail or Alternate uses

  • Services for Endless Packages

  • Solutions to Service Non-Traditional Renters

  • Combat Construction Costs

  • Sound Reduction

  • Telework Solutions

The Challenges of Technology Implementation in CRE

• • Demand Shifts

    • Elevated Expectations

    • Mobility Driven

    • Connected, Open Work

  • Supplier Tensions

    • Capital Costs Rising

    • Customer Retention decreasing

    • Disruptive Products Rising

  • Macro Shifts

    • Late Cycle Uncertainties

    • Capital is Concerned

    • Future of Work Fears

  • Tech drives more change…

    • Cloud:  5G, IoT, Edge Computing

    • Analytics: Data Monetization

    • Intelligent Interfaces

  • Tsunami of Data

    • Data center carbon emission is actually more than all airplanes combined

  • Next Wave

    • Network: Migration from productivity to creativity

• Maureen Waters,  President of Ten-X Commercial  lists areas can help bridge the gap between RE and Tech.

  • Culture- Promotion of integration and collaboration thru open office spaces

  • Customer - Encouraging tech people to interact with customers.

  • Product - Delivering benefits by small stepsso we have faster turnaround time and learn faster.

  • Data

• CRE spends about 1% revenue in R&D which is lower than other industries (5%).  → Brad Greiwe, Co-Founder and Managing Partner, Fifth Wall

• Technology is going to reprice real world asset values more in the next two decades than these asset values changed in the past century. → Dave Eisenberg, Partner, Zigg Capital