Be agile. Fail fast. Adapt rapidly.
This is how to succeed in the corporate real estate (CRE) industry this year, according to the 2019 Commercial Real Estate Outlook by the Deloitte Center for Financial Services (DCFS)
In this latest edition, Deloitte’s professionals discuss the corporate real estate trends that will have the most impact on this constantly changing industry. Their research is based on a survey of C-Suite executives from 500 real estate investment firms in 10 countries.
You can read the full report on Deloitte’s website, but we’ve summarized a few of the highlights here. Read on to discover the most transformative corporate real estate trends you’re sure to hear more about this year.
3 Big Corporate Real Estate Trends for 2019
1. Increased Tenant Centricity
When coworking space provider WeWork launched in 2010, it existed as a single space in New York City. The company now has 538 locations across 96 cities globally and is valued at more than $20 billion.
The WeWork business model is based on the idea of space-as-a-service, where companies approach property as more than just a physical space. Organizations that adopt this strategy use technology to merge the traditional philosophy of real estate (i.e., location, location, location) with the modern way in which tenants occupy and interact with space. This technique enables companies to create an experience that is not only functional but also enjoyable. By using technology like Internet of Things (IoT) sensors, artificial intelligence (AI), and predictive analytics to support initial design and redesigns, companies can adjust spaces to meet evolving tenant preferences and anticipate future needs.
That means considering not only the space itself, but amenities like on-site parking and bike storage, social events and fruit water.
The authors refer to companies like WeWork as change agents because they are “repositioning the CRE asset as not just a physical space but a service hub.” These organizations prioritize enhancing the user experience, which 41 percent of real estate investors report is a top objective.
2. Upgraded Digital Strategy and Infrastructure
Despite the fact technology has infiltrated nearly every part of CRE, many companies are either slow to adopt it or inefficient in their implementation. The latter issue is due to the tendency to invest in technology that addresses an individual business need without regarding the existing tech stack.
As a result, companies waste time and resources manipulating the legacy IT infrastructure to accommodate the new technology or reengineering the new technology to integrate with the existing infrastructure. In either case, the company will likely lose some sort of functionality in the process. Additionally, when technology decisions are made on a business unit level and not an enterprise level, it can lead to redundancies and wasted costs.
To avoid these complications, the authors recommend companies invest in “modern core technology systems that are more dynamic, automated, and easy to integrate with emerging solutions.”
(One of the most popular examples is an integrated workplace management system, or IWMS.)
Furthermore, companies must evaluate their technology needs across the entire organization, not just by department. Having a technological foundation that is both robust and scalable and an enterprise-wide digital strategy are corporate real estate trends every business must embrace.
3. Enhanced Data-Gathering and Analytics Capabilities
Over half of the investors surveyed by Deloitte believe technological advancements will have the most impact on legacy buildings within the next three years. And according to an overwhelming percentage of respondents, the way to make buildings future-ready is to invest in predictive analytics and business intelligence.
Using IoT sensors and machine learning technology, businesses can gather comprehensive, accurate data about the property. They can then use this data to determine how the space is used and what they can do to improve the tenant experience.
The authors recommend asking the following three questions to determine how to approach data-gathering and analytics:
- How could better information and new insights drive value?
- Which technologies and applications do you plan to adopt to enable better information management and advanced analytics?
- Which external and alternative data sources are you planning to leverage to unearth newer insights?
The Takeaway For CRE Leaders
Adapting to the technology-fueled CRE ecosystem will involve plenty of risk-taking and mindset shifts. But the companies that see the influence of these corporate real estate trends above and can incorporate agility into their operations are the ones that will thrive.
Corporate real estate leaders can start by considering what they can do to enhance their tenant experience (or employee experience). They should also take the time to evaluate their existing technology and data-collection capabilities to identify any gaps.
Discover how you can achieve more value with your real estate this year. Register for our Feb. 14 webinar featuring Bob Fox, Managing Principal for FOX Architects and publisher of Work Design Magazine.