In today’s innovate or die commercial real estate market, it can be difficult to keep pace with constant change. The rate at which change takes place is consistently accelerating, so put on your seatbelt—there’s no breather from industry changes in sight.
While the commercial real estate industry may be slower to adopt such rapid change than some other sectors, the most significant way to prepare for it is to have an open mind and be ready for opportunity when it knocks.
Keeping up with rapid change is a specialty for Howard Tullman, serial entrepreneur and guest speaker at a recent joint meeting of the Chicago Chapter of the Society of Industrial and Office Realtors (SIOR) and the Association of Industrial Real Estate Brokers (AIRE). Tullman addressed a variety of topics related to technology, transportation, workforce and globalization in his presentation to our chapter members. Here are some takeaways from his presentation as it relates to CRE.
Customer and client experience is king
As so much of our interactions have moved to the digital space—including social media, chatbots, automated customer service lines and remote service kiosks—human interaction is still a highly necessary aspect of our lives. While many technologists push for streamlined digital interactions and workflows, humans still need to perform complicated social tasks and engage in face-to-face interactions.
In a relationship-driven industry like commercial real estate, the human role in the client experience is still front and center. As such, going above and beyond to meet customers’ needs and enhance their experience will keep them engaged. And while some of the more routine tasks in the deal process are benefitting from automation, the human process of negotiating and landing a deal isn’t going away any time soon.
Transparency is key—but data security matters
Historically, real estate has been a fairly opaque industry. That’s changing, with apps and platforms that allow clients to find properties on their own, blockchain technology allowing all parties to see real-time updates throughout the deal process and other similar platforms offering shared real-time information.
However, an increase in transparency doesn’t have to equal a decrease in security and data privacy. One way to smooth the waves of change: reassure your clients that their data security matters, and invest in IT solutions to protect your company’s and clients’ data.
Workforce training needs a facelift
The labor that will be required in the warehouse of the (near) future is much more complex than the educational programs available in most communities today. Until our education system makes a more concentrated effort in enhancing trade school programs, it’s on manufacturing firms themselves to make sure their employees understand and are adept at applying new technologies.
For example, AT&T provided an intensive two-year program for their skilled labor employees to train them on all the new skills they’d need to continue at the company. The trainings were held outside of the workday but AT&T provided and paid for it—and any employees that didn’t opt in would be let go. While this was a huge commitment—and investment—on AT&T’s part, they ended up with an engaged and upskilled workforce with no gaps in institutional knowledge or training.
Location plays a role in fitting the right skill sets with the right functions, since different communities offer different skill levels and volume of workers. Commercial real estate advisors keeping up with workforce training trends are particularly well-positioned to help companies going through such transitions to find the right sites and spaces for their workforce needs.
Consumer demand is driving many CRE trends
The rise of e-commerce isn’t going anywhere any time soon. Consumers have come to expect a certain level of convenience that has impacted industrial real estate as most distributors have rented or built last mile facilities to meet demand in city centers and other highly populated areas. As consumers’ level of expectations (easier returns, one-day or even same-day shipping) continues to increase, last mile facilities and more creative uses for industrial real estate will become essential to stay ahead of the game.
Nothing is forever in our innovation-driven environment, and commercial real estate might already be playing catch-up to overall trends and transformations. The game is changing, and it will keep changing whether you’re prepared or not.
Are you ready for the changes on their way?
About the author
Dan Benassi, SIOR co-founded and serves as Principal of Entre Commercial Realty LLC. His clients benefit from his experience with a wide variety of successful projects from creative lease transactions to complex build-to-suit developments. Benassi also serves as the 2019 Chapter President of SIOR Chicago.