How A Tenant-Centric World Will Accelerate CRE’s Tech Revolution
What changes should the commercial real estate industry brace itself for in the coming years? It boils down to one theme, expressed by Real Data Management CEO Peter Boritz: disrupt or be disrupted. Peter will be a panelist at Bisnow's Future of Real Estate event on April 26 at The Highline Hotel.
Peter says the office-as-a-service model embodied in things like WeWork has a lot further to go—so much so that he says we might even see long-term leases start to look like an arcane model years down the road.
But in the meantime, he says, there’s a lot of toolkit streamlining to be done. There are now tools for almost every aspect of what commercial real estate pros do—but Peter says some economization of tech stacks is in order, because it can all get unwieldy when you have one app for building management, another for accounting and a third, fourth and fifth for other things.
Onyx Equities managing partner Jonathan Schultz, also on the bill at our event, says having some overlap in the functions of different tech tools points to a lot of adoption and experimentation, which in his view is nothing but a good thing.
The competition among technologies means the products that don’t get people results won't be around for long, driving more innovation in commercial real estate tech.
That would be fitting because, as Jonathan points out, the residential real estate world is arguably ahead of the commercial side for adoption of tech tools.
As he puts it, that’s because every residential buyer is like a CEO, but when you lease an office, you only have one CEO per deal—and that person’s usually not the most technologically advanced mind in a company. A dinosaur’s skill set will still get you the deal much of the time, if that dinosaur knows the market.
But there’s a shift afoot, where landlords are assessing tenants’ needs with the workforce in mind and not just giving the CEO what she or he wants when they’re on the hunt for space. This, Jonathan says, will be one of the keys to speeding adoption and streamlining the use of tech tools, as landlords and brokers increasingly look at what rank-and-file workers look for in space.
UniKey Technologies president Phil Dumas, who'll also be speaking next week, says we’re on the cusp of the Internet of Things (IOT) becoming both a major part of tenant amenity packages and a major part of landlords optimizing operating income.
Gyms and rooftop decks? Phil points out that the basis is there to connect access to these amenities to a centralized system that would let their use be monetized on a by-the-minute, rather than by-the-month, basis. Micro-level management (and monetization) along those lines is something Phil says we’d better get ready for.
That also means some of the control will be in the hands of tenants themselves. As CodeGreen Solutions principal Chris Cayten notes, tenants use 70& to 80% of the energy in commercial buildings.
Companies with a lot of Millennials on their payrolls are already more conscious of energy efficiency, but by 2025, if they’re in NYC and have 10k SF of space or more, they’ll be required by Local Law 88 to have a submeter in place and report their energy usage. It’s one reason that tenant control over systems like HVAC is part of the way the wind is blowing, Chris says.