Every year, managing corporate real estate (CRE) becomes more and more complicated. There are new building city codes and requirements, new federal government regulations and new expectations from tenants.
Alas, 2018 will be no different. If you’re concerned about staying ahead of the curve, you’re in the right place. Here are three of the biggest corporate real estate disruptors you need to know about this year.
3 Big Disruptors in Corporate Real Estate
1. Internet of Things (loT)
Among our favorite topics to discuss on the iOFFICE blog is the Internet of Things (IoT) and how it can help facilities management. But in the coming year, the IoT is poised to become a powerful tool for corporate real estate professionals as well.
Many of the advantages the IoT can offer CRE leaders overlap with the benefits facilities managers enjoy. For example, IoT-powered sensors support the reduction of operational costs by identifying ways to decrease energy consumption and improve sustainability. The technology also enables facilities and CRE professionals to employ predictive asset maintenance and strengthen facility security.
But what the IoT also offers CRE leaders are two very important advantages:
- Superiority over competitors who can’t provide potential tenants with the benefits of IoT technology
- More valuable property, since IoT technology may become a “must-have” and not a “nice-to-have” in the eyes of corporate tenants
In other words, if you don’t start the process of implementing IoT technology to make your buildings “smart”, you risk losing business from both potential and current tenants.
2. New Lease Accounting Standards
Due to the new lease accounting standards introduced by the Financial Accounting Standards Board (FASB), this year you’ll have to record lease information on quarterly statements a bit differently.
The two biggest hurdles CRE leaders will face as a result of the FASB’s objective to increase the transparency of corporate real estate activities are:
- Having access to more details about each lease in the company’s portfolio. More specifically, since only leases with terms over 12 months must be reported (unless the business intends to purchase the property), CRE professionals must monitor lease terms more closely.
- Not being able to rely on physical documentation to record lease information. Organizations must be able to provide accurate, up-to-date information quickly, which means manually cataloging lease details will no longer be an option.
3. Blockchain Technology
It’s safe to assume you’re already familiar with the Internet of Things and FASB updates. However, there’s a new development in the CRE world that you may not know as much about: blockchain technology.
Here’s how two blockchain experts define the technology:
“At its most basic, the blockchain is a global spreadsheet—an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Why we’re personally fans of this definition is the phrase “incorruptible digital ledger.” Not only does it sound impressive, it also perfectly describes the biggest benefit of investing in integrated workplace management system (IWMS) software. Both blockchain technology and IWMS software dramatically decrease the risk of human error (incorruptible) and erase the need for recording critical information on physical documents (digital).
So how will blockchain technology disrupt corporate real estate in 2018? Similarly to how an IWMS allows for the transfer of information quickly, blockchain technology makes it possible to transfer value (money and assets) just as easily. Ragner Liftrasir, the president of the International Blockchain Real Estate Association (IBREA), lists four specific places corporate real estate leaders can see the benefits of blockchain technology:
- Disintermediation. Real estate transactions will be processed remarkably more quickly as every important detail for every property (i.e., occupancy, building performance and physical attributes) will be available online.
- Fraud protection. Digital certificates will make it impossible to forge ownership documents, eliminating the ability to make false real estate listings.
- Digital currency. The receipt and transfer of physical currency requires humans, who, unfortunately, are fallible. But digital currency can be received and transferred from one account to another without worrying about interference from less-than-scrupulous individuals.
- Smart contracts. Again, instead of relying on representatives who may either have nefarious intentions or just plain be a human who makes mistakes, smart contracts ensure all transactions are processed correctly and funds are transferred appropriately through digital automation rules.
Surviving The Future of Corporate Real Estate
These examples are only a few of the ways the corporate real estate industry is evolving. However, if you not only passively stay informed of the latest news but actively seek out details about what’s on the horizon, you’ll be in good shape to tackle this new world head on.
While no one can predict the future with certainty, iOFFICE can equip CRE leaders with the real estate management software tools they need to “future-proof” their organizations as much as possible. Our IWMS software can help CREs manage leases, manage space and optimize space utilization. To learn more, check out this short video.