Rapid advances in technology are squeezing your company's commercial real estate from both ends. From the bottom up, they are changing the ways that buildings are built and operated. At the other side of the tenancy continuum, new technology is creating new ways to work that require different types of spaces. As you try to navigate these changing waters, here are some of the latest top-down and bottom-up trends that are impacting your company's portfolio, and how to best handle them.
Decentralized IT
The move towards decentralizing IT and moving it to the cloud has two benefits as regards your company's commercial real estate. First, if you are in the cloud, you can make do with both less space for IT infrastructure and, frequently, with less wiring. Instead of needing server rooms at each location, you can probably get away with an Internet connection, a firewall and a network switch. This saves a great deal of space. At the same time, moving more and more services into the cloud means that you need fewer and fewer dedicated circuits. While the need for network performance means that you might not be able to go completely wireless, only having to run Ethernet or fiber networking cable throughout the office can represent significant savings.
Coworking Spaces
Coworking spaces are the newest version of the venerable executive suite space. Like executive suites, they allow multiple companies to share an office's resources, giving everyone a big office experience at a much lower cost. Unlike traditional executive suites, though, they are designed to be collaborative and open, following much more of a Generation Y ethos than that of the Baby Boom.
If you need to have small satellite or branch offices, a coworking space can be an excellent replacement for traditional office commercial real estate. In addition, if you plan to continue attracting Generation Y and Z workers, spending some time in these spaces to learn how they work and how they feel is a good idea. It will help you understand how to create a Millennial-friendly workplace that can help you recruit talent more effectively.
An (Un) Level Playing Field
In some ways, technology levels the playing field between you and your broker. 20 years ago, commercial real estate markets were almost completely opaque. Today, tools like CoStar, Compstak, 42floors and LoopNet are all making more commercial real estate data available to anyone who either logs in or logs in and pays than ever before. While this is reducing the gap between users and brokers, it is not completely eliminating it for three important reasons:
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The best of these tools can be extremely expensive which makes them cost-effective for brokers that use them all day, but out of reach for a company that only needs data occasionally.
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Many of these tools provide an incomplete view of the market, the spaces in it and the transactions that have happened. While they are working to improve their data quality, most still have a long way to go.
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Even up to now, much of what needs to happen in commercial real estate still happens between professionals on the phone or face to face. Databases and virtual deals rooms help, but they can't make decisions or get deals closed.
High-Tech Property and Site Management
Finally, buildings are running better than ever thanks to new management technologies. Everything from turning on and off lights to monitoring security systems can be digitized. While these technologies sometimes require initial capital investments and significant learning curves, they also make commercial real estate work better and cost less over the long run.
Stay Ahead of The Curve!
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