December 14, 2017
“Commercial Real Estate is an Antiquated Business” and 5 other highlights from CRETech 2017 in New York
Not many industry events have the ability to fill a conference agenda with leading voices from global companies, active industry venture capitalists, CIO’s from the most recognized brands and the leading landlords in New York City.
Last week, the team at CRETech managed to not only assemble these leading voices in one room, but stacked them together to provide expert perspectives on the current state and future of not only CRE Technology, but CRE in general.
With so much expertise in one room, trying to capture all of the highlights would have been an impossible task. However, there were some key takeaways from the discussions that stood out. Here are the 5 comments or insights that caught our attention.
“What’s valuable in our spaces is investing in the
quality of life for our employees.”
CRE is becoming more human. It was a theme that resonated through most conversations as the future of work is evolving. For organizations like Bloomberg, the culture of the space is as important, if not more important, than the location. No longer are employees held captive, but when they are under a single roof, the value and character of those spaces must be attractive to a variety of workers.
Amenities like wellness spaces, food halls, conference centers, gyms, et cetera are increasingly important, but so is the way the space makes employees feel, how it represents the brand and how effectively it helps them manage their work. Technology has become the heart of modern commercial space.
“Selling into organizations that have been doing something a certain way
for generations is not easy.”
Much has been said about the challenge that comes with behavioral change. CRE’s resistance to technology was a primary topic of discussion, with most leaders essentially telling the audience that those holding on to antiquated business practices need to, essentially, “get over it.”
However, members of the VC panel correctly pointed out that the market is saturated and many startups have not only failed to understand the competitive landscape, but also to differentiate themselves in a crowded market.
As with the overall trends of digital transformation and industry disruption, modernizing and changing our industry will take time. The best technology doesn’t always win, so buyers need to understand the space and explore their options before defaulting to the first suitor.
“Tech has played a huge role in tracking
If you’re responsible for some of the largest development projects in New York City or the biggest landlord, odds are you know a bit about market trends and what moves the market. These Industry titans spoke at length about how the human assets have become a bigger priority than the physical assets for businesses.
Investment is going up in places that feel “authentic” versus the traditional concept of “location.” Traditional data sources and institutional knowledge will quickly become less valuable as leaders begin to experiment with alternative data sources to optimize their strategy. It’s time to start expanding and experimenting beyond the norm and recent success stories are increasing a willingness to try.
“We aren’t in the availability and space industry,
we’re in the advisory business.”
The most fascinating panel included technology and digital leaders from the largest brokerages in the country. This group of leaders provided the necessary blueprint for driving change in CRE. With 30% of the market represented among them, they recognize that they will be the biggest drivers and accelerators of the technology shift for CRE.
All agreed that clients are actively looking for technology solutions and data to drive the process. CRE professionals need to understand that their clients expect experiences in their professional life that are equal to the digital experiences they have in their personal lives. These expectations require a change in the way businesses is conducted as the nature of relationships are changing.
The consensus is that trends that have digitized the residential real estate market will absolutely translate to the Commercial Real Estate market. Residential was fundamentally changed by giving the end consumer the ability to explore and discover. In CRE, the entire industry will benefit from this shift, but driving adoption will take time and the right technology solutions.
“Startups that think openly will get attention.”
When it comes to technology, automation solutions and those that don’t easily integrate will see the slowest growth. Technology is still a growing capability in CRE, so any additional work or heavy lifting required by an internal technology team is a deterrent. For many organizations, not just in CRE, complicated technology faces user adoption challenges that requires internal teams to invest heavily in training and often reducing the return on investment.
Overall, C-Suite representatives from the five largest brokerages in the country clearly stated that the industry must open up, work together and rapidly accelerate innovation. On multiple occasions, the panel acknowledged the “monopolistic nature” of the CRE Industry and clearly called for an end to closed-door practices and walled-off ecosystems.
Representing 30% of the national market, the panel essentially put organizations clinging to closed market, dated business practices on notice. They are willing to work together to find alternative solutions. They are willing to experiment and are open to change.
These 5 highlights are just a snippet of the insights and intelligence displayed at CRETech. To capture the full experience of the panels, the tradeshow floor and the side conversations would require a much longer post. However, CRETech has quickly established itself as a “must attend” event for not only Technology Startups, but the entire CRE Industry looking to understand what’s next.
Kudos to the entire team and we look forward to 2018!